A decade of rocketing house prices is fuelling demand in the private rental market, according to research by MORE TH>N, a leading household insurer.

Over 2 million households now privately rent accommodation in the UK, an increase of 327,246 (18%) over the last ten years. The private rental market now accounts for just over 10% of the housing market and average rental costs have increased by 52% since 1994.

As first time buyers are increasingly being squeezed out of the housing market the age profile of people in rented accommodation is increasing. People aged 30-44 now account for 30% of the rental market compared to 20% in 1980, in addition there are more 30 - 59 year olds renting.

This trend reflects the fact that house prices are outpacing both rental prices and disposable income growth and lifestyles are changing with a greater number of people choosing to live on their own.

Graham Hollebon, Head of Personal Finance at MORE TH>N, comments: "As a nation we're now accepting the fact that renting property can give us greater flexibility in an era where property prices have risen so dramatically. It's also becoming more socially acceptable to rent in the UK as we follow a more European approach."

Regional variations

All areas in the UK have seen a growth in the number of people privately renting as first time buyers are unable to get on the property ladder:

• London has seen the highest increase in private renting costs, up 80% since 1994. This may be largely due to increased demand caused by a 168% increase in house prices.
• The East Midlands and South East also saw huge increases, 75% and 65% respectively.
• The North West on the other hand has seen the lowest increase in private rents up 50% increase since 1994. Over the same period house prices in this area have only increased by 46%.