Renting over owning: The housing crisis rages on

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  Quantumrun Foresight
• October 30, 2023

Insight summary

The trend of renting over owning, dubbed "Generation Rent," is burgeoning globally, especially in developed nations. This shift, influenced by various socio-economic factors and exacerbated by a housing crisis, reveals a change in young adults' housing preferences towards private renting and away from home ownership and social housing. Particularly after the 2008 Financial Crisis, hurdles like stringent mortgage approvals and soaring property prices against stagnant wages have deterred home purchases. Meanwhile, some young individuals prefer the renting model for its flexibility amidst a growing digital nomad culture and escalating urban rent prices, despite the associated challenges like delayed family formation and diverted consumer spending due to high housing costs.

Renting over owning context

Generation Rent reflects recent developments in young people’s housing paths, including an increase in private renting and a simultaneous drop in home ownership and social housing. In the UK, the private-rented sector (PRS) has increasingly housed young people for longer periods, fuelling worries about housing inequalities. This pattern is not unique to the UK, however. Following the 2008 Global Financial Crisis, problems in obtaining homeownership and a scarcity of public housing have led to similar issues throughout Australia, New Zealand, Canada, the United States, and Spain. 

It is low-income people who are affected the most by the housing crisis. Research on Generation Rent has mostly focused on this phenomenon without highlighting the increasing number of low-income private renters who would have been eligible for social housing in the past. Nonetheless, renting over owning is becoming more common than ever. One in five households in the UK is now renting privately, and these renters are getting younger. People aged 25 to 34 now comprise 35 percent of households in the PRS. In a society that puts a premium on homeownership, the increasing number of people who willingly and unwillingly rent instead of buying homes is naturally concerning.

Disruptive impact

Some people are forced to rent rather than own a house because it has become more difficult to obtain a mortgage. In the past, banks were more willing to lend money to people with less-than-perfect credit scores. However, since the financial crisis of 2008, financial institutions have become much stricter about loan applications. This roadblock has made it more difficult for young people to get on the property ladder. Another reason for the increase in renting is that property prices have risen faster than wages. Even if young people can afford a mortgage, they may not be able to afford the monthly repayments. In some cities, such as London, house prices have risen so much that even middle-income earners struggle to buy a property. 

The increase in renting has implications for the property market and businesses. For example, the demand for rental properties will likely increase, leading to higher rates. Even renting a decent apartment will become increasingly challenging. However, businesses that cater to renters, such as furniture rental and house moving services, are likely to do well due to this trend. Renting over owning also has implications for society. Many people living in rented accommodation can create social problems, such as overcrowding and crime. Moving out of homes frequently can also make it difficult for people to put down roots in a community or feel a sense of belongingness. Despite the challenges, renting does offer some advantages over owning. For example, renters can easily move as needed when career and business opportunities come along. Renters also have the flexibility to live in areas that they otherwise can’t afford to buy homes in. 

Wider implications of renting over owning

Possible implications of renting over owning may include: 

• More young people choosing to live a nomadic lifestyle, including transitioning to freelance careers. The increasing popularity of the digital nomad lifestyle making buying homes unappealing and a liability instead of an asset.


• Rent prices continuing to escalate in major cities, discouraging employees from returning to the office.


• Young people choosing to live with their parents for extended periods because they can neither afford to rent nor own a home. 


• Accelerated population decline as the inability to afford housing impacts family formation and the ability to afford raising children.


• Reduced economic activity as a growing percentage of consumer’s spending power is diverted to housing costs.

Questions to comment on

• What policies can government promote to reduce the cost of housing?


• How can governments support young people so they can own homes?