Nearly a quarter of UK households will be renting privately by the end of 2021, according to a new report, with stagnant wages and mounting house prices to blame.
Estate agency Knight Frank commissioned a YouGov survey of more than 10,000 tenants, and also spoke to 26 major investors, as part of its latest annual report.
The report estimates that 5.79 million households will rent from a private landlord by 2021, up from the five million currently renting privately. This represents 21 per cent of the total households in the UK, and 25 per cent of those renting privately are families with children.
Knight and Frank also predict there to be 14.3 million owner occupiers, and 4.3 million social tenants, by 2021.
68 per cent of renters said they expect to still be living in rented accommodation in three years. A significant number of tenants rent because they are trying to save money for a deposit on a house, but one third of those surveyed said they were renting through choice.
Out of these people, the most popular reasons for renting were flexibility and the reduced responsibility. The biggest consideration among tenants was rent affordability, followed by location.
One fifth responded that they rented because it allowed them to live in an area where they could not afford to buy a home. The most recent property price survey from Halifax found the average UK flat or house price to be £220,706, which is too expensive for many young people.
Tim Hyatt, head of residential lettings at Knight Frank, said: “The number of people renting out of choice rather than due to affordability of ownership constraints is an interesting indicator of how the private rented sector market will continue to thrive in terms of tenant demand.”