Home ownership in England 'at its lowest level in 30 years'
Home ownership in England is at its lowest level in 30 years. Does it matter?
Home ownership in England is down to 63.8%, its lowest level since 1986.
That's according to new findings from The Resolution Foundation, which show there has been a sharp drop since peak ownership levels in the early 2000s, albeit with a brief rise in 2014.
And it’s not just a London-centric issue: northern cities are actually leading the fall, with Greater Manchester seeing the biggest drop.
The proportion of home owners in the city decreased from 72% in April 2003 to 58% this year, according to The Resolution Foundation.
Source: Resolution Foundation
Double-digit falls in home ownership have also been seen in South and West Yorkshire, driven by Sheffield and Leeds, and the West Midlands Metropolitan Area.
Ownership has fallen across the rest of the UK too, dropping from 73% to 63% in Northern Ireland since 2006, 59% to 63% in Scotland since 2004 and 75% to 70% in Wales since 2006.
Across England, the proportion of private renters nearly doubled between 2003 and 2015, closer to tripling in Greater Manchester.
Looking to buy? Search for a cheap mortgage rate
Why is it happening?
It comes down to a combination of causes.
Matthew Whittaker, chief economist from the Resolution Foundation, told the BBC's Today programme: "What we particularly have seen since 2002-03 is that incomes simply haven't kept pace with house prices, so it's not just that house prices have gone up.
"We had access to lots of relatively easy credit and the position we're in now is that credit has been turned off.
"We have this sense now that house prices have become detached from people's earnings ... and we no longer have the route through 100% mortgages and the like for getting on to the housing ladder."
What's more, the popularity of Buy to Let limits an already stretched housing supply and pushes up house prices while fuelling the private rental sector.
People are buying homes in later life as well.
The latest English Housing Survey reveals that the average age of first-time buyers has increased from 30 to 33 over the past 20 years. In 2014-15, 61% of first time buyers were aged 25-34 and between 1994-95 and 2014-15 the proportion of first time buyers aged 16-24 years fell from 23% to just 10%, with more buyers in the older age brackets.
This could have something to do with sky-rocketing house prices. Back in 1986, the average first-time buyer was paying just under £30,000 for their new home, but this had risen to £150,000 by 2015.
In London the average first-time buyer paid almost £330,000 in 2015, which helps explain why only a third of homes in the capital are owned.
Already a homeowner? Look for a cheap remortgage deal
Should we care?
It was Thatcher’s dream for every Brit to own a home back in 1980. But even outside that there is something of an obsession in the UK to own your own home.
Clearly we still do care. Figures from the English Housing Survey’s First Time Buyer report shows that fewer than one in 10 think they’ll never buy a home because they’re happy where they are. Just 3% prefer the flexibility of renting.
However, of those who never expect to buy, 65% say they just can’t see themselves ever being able to afford it. It's the deposit that's the real kicker, with buyers struggling to meet the cost, meaning that they're trapped by paying more for rent in the long-term.
Private renting accounts for 30% of the average person’s income, compared with 23% for mortgages.
What do you think? Tell us in the comments section below.
Already a homeowner? Find the right fixed-rate or tracker mortgage for you at the loveMONEY mortgage centre
Housing stories you might have missed:
Get paid £3,000 to save for a house
9 surprising things that could BOOST or SLASH your home's value
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature