Since 2007 the private rented sector has grown from 14% to 18% of households while owner-occupation has dropped from 68% to 64% and social renting has also fallen.
This has happened with BTL mortgages financing just 420,000 (32%) of the additional 1.31 million houses in the private rented sector since 2007, with the remainder made up of cash or commercially-funded purchases and properties rented out by their existing owners.
The IMLA report identifies multiple trends driving the rise of private renting by creating extra demand, including: the fall in social housing; growing obstacles to homeownership; changes in the employment landscape; greater numbers of students; high levels of immigration; later marriage and rising separation rates.
It emphasises that failing to increase UK housing supply in line with population and household growth is the major cause of first-time buyer frustrations and the heightened sense of competition for buying homes.
Low interest rates and quantitative easing have also advantaged landlords, with financial regulations such as limits on interest-only mortgages adding to the obstacles facing would-be homeowners.
Demographic projections point to rapidly rising housing demand, with the UK population expected to reach 67.8 million by 2020 and 75.3 million by 2035.
If current trends continue without a major policy or economic shift to address the shortage of new homes, the majority of UK households will be renting in the private and social sectors by 2032 for the first time since the early 1970s – with homeownership increasingly the preserve of the old.
The continuing fall in owner-occupation and decline of social renting would also mean more than a third of households renting privately within two decades – twice as many as today.