Rents will easily outpace house prices over the next five years as the private rented sector continues to expand, believes Savills (SVS). The upmarket estate agent expects house price growth of 12 per cent in the UK "mainstream" market, which excludes top-end properties, over the next five years - a 3 per cent loss in real terms. But rental growth of 18 per cent is forecast over the same period.
The big theory behind these numbers is that renting will become more and more common. "Owner-occupation has been in decline since the turn of the millennium, but it's only since the credit crunch that it has become really noticeable," says Yolande Barnes, head of residential research.
With the average first-time buyer deposit running at about 80 per cent of average income - compared with 10 per cent in the early 1990s - more households need to rent for longer. Supply of homes to rent, meanwhile, remains constrained by tight finance and fragmented demand. The total value of buy-to-let loans issued so far this year is £11.8bn - up 19 per cent on the same period last year but still scarcely more than a third of the 2007 peak. Meanwhile, insurance companies have long talked about re-entering the sector, but have yet to find a way to source bulk portfolios.
This imbalance can be resolved either by a major correction in house prices to restore affordability or by rising rents. Ms Barnes believes the latter is more likely. "With interest rates so low, the mechanism for a crash just isn't there," she says.
The theory that renting is on a long-term upward trend is gaining currency among big property brokers, but remains controversial among economists. Capital Economics, famous for its bearish forecasts, places greater weight on affordability and 'mean reversion', forecasting an ongoing house price correction.
Meanwhile, Professor Michael Ball, an economist at Reading, believes young households are renting not because they cannot afford to buy, but because they expect homes will be cheaper in the future. He also thinks the current size of the private rented sector is being artificially - and temporarily - boosted by households that are letting out the home they own and renting elsewhere. The implication is that owner occupation will start to rise again during the next housing cycle.
What nobody disputes is that residential landlords have hit a purple patch that will last at least until the end of the current housing downturn. Beyond that, the private rented sector - which was only born in its modern form about 15 years ago - is in uncharted waters.
