House prices in London have been predicted to soar from the current average of £515,000 to almost £1m by 2025, according to the Daily Mail.
The percentage of home owners will drop from 62 per cent to 55 per cent in the next 10 years, a report by the Association of Residential Letting Agents and the National Association of Estate Agents shows, while the percentage of renters is expected to increase from 20 to 29 by 2025.
“If house prices really do reach those levels by 2025, it's hard to see how any first-time buyers will be able to afford to climb onto the property ladder,” said HouseSimple.com chief executive of estate agents Alex Gosling.
“With house prices set to rise further, even more strain will be put on the rental market as people are forced to rent longer before they can buy,” said property crowdfunding platform Property Partner director of investments Rob Weaver.
“We need more high quality rental properties because right now demand is massively outstripping supply and that is only likely to get worse.
“It's a vicious circle. House prices rise which forces people to rent longer, which means there are not enough rental properties to go around, forcing up rents, which means tenants aren't able to save for a house deposit.”
“House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear,” said Mark Hayward, managing director of the NAEA.
“House Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many. Increased rental costs will also make it more difficult for current renters to save for a house deposit as much of their income will be eaten up in rent.”