A new report has found that home ownership in the UK is ‘in crisis’, with the proportion of people owning their home falling to the lowest level since 1988. A lack of high value mortgage finance and worries about job security and affordability are preventing first time buyers from getting onto the housing ladder, resulting in increasing ‘social exclusion.’
A report published by the lobby group the HomeOwners Alliance (HOA) has found that owner-occupation in the UK has fallen to its lowest level since 1988. The HOA says the owner-occupation rate peaked at 69.7 per cent in the UK in 2002, falling to a current rate of 64.7 per cent. That rate is the 17th highest among the 27 EU countries, and lower than that of Bulgaria, Ireland, Italy and Romania.
This is despite owner-occupation remaining by far the most desired form of housing tenure in the UK. According to the latest British Social Attitudes survey, 86 per cent of Britons want to own their own home.
Islay Robinson, director of London mortgage broker Enness Private Clients, said: “Housing shortages, high house prices and a lack of high loan to value mortgage finance are creating real problems for millions of households across the UK.”
The Guardian reports that there are now about 5 million households locked out of the property market. And, rising rents mean these households are unable to save the deposit that they need to get a foothold on the property ladder.
The HOA’s report – which uses data from the Department for Communities and Local Government and its counterparts in Wales, Scotland and Northern Ireland – shows that London is the greatest affected. Fewer than half of properties in the city are now owner-occupied, the lowest level since figures for the capital began in 1991.
Mr Robinson, the high net worth mortgage specialist, added: “Renters are currently stuck in a vicious circle. Recent figures have shown that the average monthly rent across England and Wales has hit an all time high, meaning that households are spending more of their disposable income on their rent.
“This means that they are even less capable of putting aside enough money to afford the 10-15 per cent deposits that many large mortgage lenders demand.”
Paula Higgins, chief executive of the HOA, said: “This decline in home ownership is depriving a generation of the chance to own the roof over their head, shattering their dreams and aspirations. It is preventing millions of people from living the sort of lives they want to. Buying your first home is returning to being a privilege of elites.”
The Guardian reports that the social consequences of falling home ownership were ‘profound and long-lasting’. They include a rise in poverty among pensioners and children, more social inequality and more people facing life in insecure rented accommodation.
Duncan Stott of pressure group Priced Out said: “The housing market is creating serious difficulties for a generation of priced-out first-time buyers. House prices remain at levels way out of reach, leaving would-be buyers stuck in the rental market, where ever-increasing rents make it a real challenge to save up for a deposit. While house prices remain so unaffordable it is inevitable that home ownership will decline.”