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© Tim Ireland/PARising house prices and sluggish wage growth have left many middle-aged people priced out of the property market.
Home ownership has collapsed for adults in their prime working age, according to official figures that show those in their mid-30s to mid-40s are three times more likely to rent than 20 years ago.

In a reflection of surging house prices and a lost decade for wage growth since the financial crisis, the Office for National Statistics found that a third of 35- to 44-year-olds in England were renting from a private landlord in 2017, compared with fewer than one in 10 in 1997.

The government statistics agency said home ownership had become increasingly concentrated among people over the age of 65. Almost three-quarters of adults in the generation that includes baby boomers born after the second world war own their own homes outright, up from just over half in 1993.

Against a backdrop of rising generational divisions in modern Britain, the ONS linked Margaret Thatcher's flagship right-to-buy policy with the boom in home ownership among older Britons, as well as a slump in social housing across the country.


Comment: Thatcher's policy would have had much less impact had successive governments built affordable and decent social housing as they had promised.


Since the launch of the scheme in 1979, which allowed social housing tenants to buy their homes at reduced prices, the proportion of council properties in Britain has slumped from 33.2% to only 17.6% in 2017.

The findings from the ONS come with potentially damaging implications for living standards for the current generation of adults under the age of 65, who are poised to enter retirement in worse financial health than their parents.

According to research from the insurer Royal London, someone who owns their home outright could expect to maintain their living standards on a pension pot of about £260,000, while someone who rents privately would need almost double this, at about £445,000.

The ONS said that if the declining home ownership trend continued for the current generation of 35- to 44-year-olds, older people in future would be more likely to live in private rented accommodation than today.

Lindsay Judge, the principal research and policy analyst at the Resolution Foundation thinktank, said the government should reform its regulations covering the private rented sector to make sure homes are fit for older people.

"The prospect of renting privately in retirement will alarm many people as it could mean high costs, and low levels of housing security. It also carries huge cost implications for the state as the UK's housing benefit bill could escalate," she said.

The ONS found early signals to suggest the current trajectory could continue, including figures showing that 15.8% of 45- to 54-year-olds rent from private landlords, up from only 5.6% in 1997.

One in three of the millennial generation, born between the mid-1980s and the mid-1990s, are expected to never own their own home, with many forced to live and raise families in insecure privately rented properties.

House prices in some parts of the country have risen out of reach for young adults. According to the ONS, the average full-time worker could expect to pay about 7.8 times their annual earnings on purchasing a home, compared with about 3.5 in the early 1990s.

Kensington and Chelsea in London is the most unaffordable place in the country at 44.5 times average annual earnings. Copeland, in the north-west of England, is the most affordable at 2.5 times the average pay.

Renting from a private landlord tends to be most common at younger ages but then gradually declines as people take out mortgages or receive an inheritance from family. However, the ONS said that people in every under-65 age bracket were now far more likely to rent privately than 10 or 20 years ago.

Private rental could have some advantages for older people, including reduced maintenance responsibilities and costs at a time when people could find it harder to maintain their home.

However, Nathan Long, a senior analyst at Hargreaves Lansdown, a financial investment platform, said that many middle-aged private renters would face problems in the future.

"Not only were they born too late to benefit from final salary pensions, they were born too early to benefit from a lifetime of automatic pension saving and many won't be able to call on their house if times get tough," he said.