More adults aged 35 plus and households with children are likely be renting privately across England by 2028 according to a new report released today (20th June) from the London School of Economics and Political Science (LSE).
In the report, The Future Size and Composition of the Private Rented Sector, the researchers model four possible scenarios for the private rented sector over the next decade as well as potential changes in the make-up of the sector.
The first scenario (the ‘balanced scenario’) assumes future economic growth will be in line with current government projections and sees the private renting sector stabilise – hovering at around 18 per cent of households in England.
Under the ‘weak scenario’, there is slower economic growth which might be reflective of a poor Brexit outcome. Private renting continues to grow, from 19 per cent of all households in England to around 25 per cent.
While historically young single people and multi-adult households have dominated the growth of the private renting sector, future trends suggest more adults aged 35 plus and families with children will be renting privately. This is the case in the next decade for both the ‘weak’ and ‘balanced’ scenarios, not just in London, but across the country.
The researchers also looked at two ‘robust scenarios’ reflecting a more optimistic view of the economy and with much higher levels of housebuilding. If there was increased housing supply alongside a strong economy the scenarios suggest we would see a decrease in the number of households renting privately and an increase in home-ownership levels for the first time in two decades.
Additionally, while previous trends have been similar between London and the rest of England, all of the future scenarios suggest the scale of private renting in London will be much less responsive to macro-economic and housing market changes - especially positive ones - than the rest of the country. This reflects the extent and depth of current housing pressures in the capital.
Commenting, co-author of the report Professor Christine Whitehead of LSE London said:
“Since the turn of the century the private rented sector has increased in size dramatically as private renting has become far more mainstream, catering for a much wider range of household types. Unless the economy and new housing supply grow more rapidly than expected, these trends will continue. Housing policy must reflect changing needs.”