Britons Priced Out of Housing Market Face Renting Into Old Age

(Bloomberg) --

Years of rapidly rising house prices mean that a generation of Britons may have to rent their homes into old age, according to new analysis published Monday.

People age 35 to 44 are more than three times more likely to be renting from a private landlord today than they were in 1993, the Office for National Statistics said in a report that will add to already-mounting concerns over social divisions in the U.K.

“While only 6% of people aged 65 years and over rent privately today, this is likely to increase in the future if people who are currently in their 30s, 40s and 50s in the private rental sector remain so into older ages,” the statistics office said.

U.K. house prices have tripled over the past two decades and risen at an even faster pace in London, where the average home now costs almost half a million pounds ($650,000), according to the Land Registry.

While rent may be affordable to people of working age, it may cease to be so after retirement when household income can decrease significantly. The ONS cited research by insurer Royal London showing that someone who owns their own home can expect to maintain their standard of living with a pension pot of 260,000 pounds, whereas a person who rents privately would require 445,000 pounds.

These costs would likely outweigh the benefits of lifelong renting, which include freedom from maintenance responsibilities and costs.

To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Alaa Shahine

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