One in four households in the UK will be privately renting by 2025 – that’s the conclusion of research by respected business consultancy PwC. 

As house prices have risen much faster than earnings and social housing supply remains constrained, the number of households in the private rented sector has more than doubled since 2001, says the consultancy. 

This trend is predicted to continue with an additional 1.8m households becoming private renters by 2025. This would take the total to 7.2m households – almost one in four of the UK total by that time. 

The trend is particularly strong in the 20 to 39 year old sector where more than half will be renting privately by 2025, according to PwC. 

“Driven by a decade of soaring house prices pre-crisis and lower loan-to-value ratios post-crisis, the deposits needed by first time buyers have risen significantly. As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20 to 39 age group” says Richard Snook, senior economist at PwC. 

“There is also a rising dichotomy in the market between those (mostly older) households who own outright and those (mostly younger) households who still have a mortgage or rent to pay” he says.

John Hawksworth, chief economist at PwC, says only long-term increases in housing supply will allow greater housing affordability for would-be buyers. 

“We expect housing supply shortages to persist for at least the next decade and realistically expect to see a continuing rise in Generation Rent until at least 2025” he adds.