Buy to let landlords should get extra tax breaks to encourage them to provide more homes lower rents and more stable tenancies, according to a new study.
The action is needed to help a predicted 1.5 million young renters find a home because they are unlikely to ever afford to buy a property, says social care charity the Joseph Rowntree Foundation.
Research for the study claims many young people will never own a home, while many more will have to wait before to buy.
The report, Housing options and solutions for young people, forecasts an extra 500,000 young people will be forced to stay with their parents well into their 30s, taking the total number of young people living with mum and dad to 3.7 million by 2020.
By then, the number of home owners under 30 will nearly halve, with just 1.3 million expected to own their own homes. The number of homeless young people under 25 is predicted to rise to 81,000, with further increases expected.
The influx of young people chasing private rented homes means young families, poorer and vulnerable people will compete for tenancies, with around 310,000 more young families looking to rent in 2020.
To cope with the housing squeeze, the report authors recommend:
- Tax breaks to encourage landlords to charge affordable rents and longer tenancies
- Local letting agencies to aid young people searching for rented accommodation
- Looking at ways to provide a greater number of affordable homes
The foundation’s Kathleen Kelly said: “Our badly functioning housing system will see those on the lowest incomes really struggling to compete in the competitive rental market of 2020.
“Renting is likely to be the only game in town and young people are facing fierce competition to secure a home in what is an already diminished supply of housing.
“With 400,000 vulnerable young people, including families, on the bottom rung of a three-tier private renting system we need to avoid turning a housing crisis into a homelessness disaster.”