Scotland on-track to be UK's fastest growing rental market

Patterns of home ownership across Scotland and the rest of the UK are changing greatly, analysis from PwC has revealed.

'Generation Rent' is set to continue for some time to come. Image: TSPL

The study has found that Scotland is expected to see faster growth in private rentals than Wales, Midlands and the South.

In addition, owner-occupied numbers are forecast to fall by almost 7 per cent, with the percentage of private rentals rising by 16 per cent by 2025.

In 2000, almost two-thirds of Scots owned a home they lived in (either outright or with a mortgage), with just one in three renting fom the social sector or private landlords. But by 2025, the levels are expected to almost equalise with around half of Scots (44 per cent) expected to rent their home.

The number of rental properties in Scotland is expected to continue rising until 2025. Image: PwC

Susannah Simpson, tax partner, PwC in Scotland, said:

“A number of factors are driving this predicted shift in tenure within the housing sector: a lack of new housing supply to meet increasing demand has pushed up prices to unaffordable levels for many, mortgage deposits require savings that are well out of the reach of first time buyers and we’re also seeing younger people increasingly showing a preference for high quality rental housing.

“In a move to reverse this trend, the Scottish Government has introduced a raft of policy measures aimed at promoting home ownership, and at the same time supporting the growth in the levels of affordable homes for rent by councils or registered social landlords - for example through the National Housing Trust.

The number of rental properties in Scotland is expected to continue rising until 2025. Image: PwC

“While many housebuilders have considered the need for affordable home ownership and low cost rental properties in their development plans to date, Scottish government measure will provide them with greater confidence to pursue investment and development programmes over the coming years to meet the needs of future generations.

Scotland and the Northern regions of England are expected to see faster growth in private rentals than the Midlands and Southern regions outside of London.

Previous PwC research has highlighted the rise of private renting across the UK, particularly amongst “Generation Rent”- the name given to those aged 20-39 years old who are in rented accomodation across the country.

The study also indicates that all regions of the UK are expected to experience falling levels of home ownership and rising levels of private renting over the next ten years.

A spokesperson for the Scottish Government added: “We recognise there are many people in Scotland who aspire to own their own home and we are doing all we can to help them to do so. Since 2007, we have helped 20,000 people into home ownership with 73 per cent of these buyers aged between 18 and 35 years old.

“For 2016-17, £80 million has been allocated to help up to 2000 eligible first-time buyers on low to moderate incomes buy a home, while the current Help to Buy (Scotland) scheme has so far helped over 7800 households buy a new build home worth over £1.4 billion in sales.”