Citizen 2025 | Snakes and ladders: a decade in property

In our 2015 report, we were right to think that a challenging UK property market would continue as we headed towards 2025, with house prices rising fairly rapidly and first-time buyers still struggling to get on the property ladder.

House prices: take our prediction and double it!

In our Citizen 2025 report, 25% of our focus group of legal professionals went as far as to predict that house prices would rise between 16-20% in the next decade to 2025. In fact, this proved to be a conservative estimate, with Government data showing a 49% increase in house prices in England and Wales since 2015.

Our focus group also concurred with 2015 research by PwC, which had a quarter of UK households earmarked as rental properties by 2025, while our lawyers thought that figure could be as high as 30%.

A fall in rental properties

According to the latest Government figures, 19% of UK households in 2025 are rental properties. There are several potential reasons for this figure being below 2015’s forecast.

Reasons for a decline in rented properties

Private rental prices have increased considerably during the past 10 years

Research from rental specialist Zero Deposit in 2023 found that renters were paying 46% more per month than they were in 2014. This year, in the 12 months to February 2025, the ONS (Office for National Statistics) private rental index recorded an 8.1% increase in prices, taking the average UK rental property to £1,326 per month.

Less rental stock

This has been brought about by a less attractive rental market for landlords and investors, too. With mortgage interest relief and higher stamp duty on second homes, plus rising interest rates since 2022, buy-to-let has become less attractive financially. This has resulted in more and more private landlords leaving the market.

This is coupled with renters simply unable to afford current rental prices or not being able to find suitable properties due to competition for what stock there is available, something that may be exacerbated by the Renters’ Rights Bill. Many younger members of the population who aren’t in a position to consider buying as an alternative have remained (or moved back into) the family home. The Government’s 2021 Census data shows the number of non-dependent adult children living with parents in the UK rose by 14.7% since 2011, from 4.2 million to 4.9 million.

Similarly, the Institute for Fiscal Studies report released in 2024 put the number of 25-34 year olds living at home with their parents as having increased from 13% in 2006 to 18% in 2024. This peaked at 21% during Covid, perhaps suggesting that many of this demographic weren’t able to get back on their feet outside the family home in a tough economy post-lockdown.

Unaffordable large deposits for first-time buyers

Another barrier to home ownership is the large deposit now required; seemingly impossible for many first-time buyers to save, without an existing property from which to raise funds. In 2015, 43% of our legal focus group thought the percentage of property value needed for a house purchase deposit would increase to 11-15% by 2025. Last year, research put this figure at 20% – placing a huge strain on first-time buyers trying to raise finance to secure their first home.

“We have definitely seen an increasing use of the ‘bank of Mum and Dad’ over recent years due to the need for large deposits. The majority of first-time buyer purchases now involve gifted funds from family as many buyers struggle to save the large amounts against a backdrop of high-priced rentals and increased cost of living.

We have also seen an uptick in the use of shared ownership and help-to-buy schemes, which look to help first-time buyers get on the housing market. There have been various incarnations of these schemes over the years, but they have always been very popular.”

– Laura Roberts, joint Head of Property at Barcan and Kirby

In our 2015 report, with deposits already having increased considerably, we considered what impact this might have on the housing market.

“Some of the trends highlighted in our research are still rather rare. The idea of friends clubbing together to buy, or an increase in co-housing, for example, are currently the anomaly, not the norm. However, this may well increase as, presumably, another income when making a mortgage application could help increase potential borrowing.”

– Barcan and Kirby’s Citizen 2025 report

A rise in cohabitation

Our prediction here around friends clubbing together to buy property becoming more commonplace has begun to happen. Recent research from Halifax found that, between January and December 2023, 63% of first-time buyer mortgage applications to Halifax, Lloyds Bank and Bank of Scotland combined were by joint applicants with two or more parties.

With the average applicant age at 32, this provides a route for many young people to get on the property ladder at last. Though cohabitors in many cases, rather than married couples, this category of homeowner can still protect their investment with careful planning and sound legal advice.

Cohabitees: know your legal rights

Known as ‘TOLATA’ (The Trusts of Land and Appointment of Trustees Act 1996), this law protects non-romantic partnerships, such as friends and family who buy property together. To avoid any complications further down the line under TOLATA, many people who buy in this way make sure they have legally binding documents in place regarding ownership and responsibilities.

A Declaration of Trust drawn up by a solicitor sets out what proportion of a property each party owns and documents how it should be divided (should one or all parties wish to move on, for example).

For those who also want the finer details documented, a cohabitation agreement can be put in place. In addition to recording who owns what percentage of the property, it can include things such as who pays for what bills or is responsible for repairs.

These documents can also be used by business partners buying commercial property together.

How we can help

For straightforward advice about any of the above, whether you are buying your first home or you want to ensure you are legally protected as a cohabitee, get in touch. Call us on 0117 325 2929 or fill out our enquiry form and we will be in touch.