More households but fewer people piles pressure on house prices

The number of British households is growing, but they contain fewer people on average, research has found.

Household numbers are projected to rise from 27.5m in 2015 to 31.2m by 2030, according to research by insurer Legal & General. But the average household has shrunk to 2.3 people from 2.96 in 1970. If the trend were to continue, it could fall to 2.25 by 2030.

The research highlights the mismatch in housing supply: while smaller households are boosting the demand for one- or two-bed accommodation, only 41 per cent of new construction in 2014 catered for such buyers. Over half of new housing was one- or two-bed properties in the five years to 2010.

The study, carried out with the Centre for Economics and Business Research, predicted that by 2030 the average property will be home to just 2.25 people.

Mark Holweger, a managing director at Legal & General, said: "The classic 'two-point-four-children' family unit has become '2.4 people' in today's Britain. We are seeing smaller households inhabiting ever-smaller properties - which in turn is creating higher numbers of overall households."

The proportion living as owner-occupiers has fallen in the past decade, while those renting has risen. One-fifth of households are in rented accommodation in England, but this is expected to rise to at least 30 per cent by 2030.

The report also highlighted a continuing gravitation of the population towards urban centres, defined as settlements with 10,000 people or more. In 1950, 22 per cent of the population lived in rural areas: by 2030 this is projected to have dropped to 14 per cent.

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