Population will be trapped in rental market by 2026

March 15, 2016 by Brendan O'Neill

Property Market

According to research conducted by the Centre for Economics and Business Research, on behalf of Money.co.uk, millions of people will be trapped in the rental market in the next decade, thanks to spiralling house prices.

Around half the population will not be able to afford to buy a property and will be trapped in the rental sector. The study found that over the next 10 years, the average rent will increase by 28%, while the average salary will rise by just 20% during the same period. This will result in tenants having difficulty when managing their budgets. Some parts of the country will experience much harsher increases in rent, with London rents predicted to increase by 39% by the year 2026.

As property prices continue to rise, around one third of the UK will be renting a home, which will inflate demand. Landlords will be able to increase rents and still have an influx of tenants, as there will be a shortage of rental properties.

The deposit required for a rental property is also likely to rise, with two thirds of landlords demanding a higher deposit by 2026. Money.co.uk has called on the government to intervene to control the rapidly rising rents and deposits, to prevent people being forced off the rental ladder.

Rising property prices have made it much harder for people to buy their own home, which is why borrowers should seek advice from a CeMAP qualified mortgage adviser before making a decision to rent.