A new report looks at how the UK’s housing market will appear in 2040. The results seem bleak.
The research, conducted by The Joseph Rowntree Foundation (JRF), claims that rent increases in the private rental sector could put future generations in poverty and add billions to the housing benefit bill.
They predict that a fifth of the population in England will rent privately by 2040. The number of people in social housing will decline to one household in ten, compared to one in seven today.
The JRF identify a a lack of investment in building new homes as the main culprit behind the worsening situation for Britain’s renters.
They project that private rents might increase by nearly 90% by 2040 with income only rising by 40% over the same period.
This would mean that real household income would reach £45,500 in 2040 (compared to £32,300 in 2008) while the median private rent amount for a two-bedroom property would increase to £250 per week from the 2008 amount of £132 per week.
If this occurred, the JRF report says, 5.68 million private renters would live in poverty in 2040 compared to only 3.1 million in 2008.
Other analysts are less despondent, pointing out there are several cues for optimism over the next 26 years.
David Lawrenson, from Letting Focus, argues that the supply of private rental property will increase over the next few years. Driven by an improving economy, a relaxing of planning regulations, and pension changes encouraging buy-to-let investments, the private rental sector may grow considerably more than anticipated over the next 26 years.
As physicist Niels Bohr famously said: “Prediction is very difficult, especially if it’s about the future.”
Map by Joseph Rowntree Foundation