Home ownership at lowest level for 30 years
English home ownership has fallen to its lowest level in 30 years with Greater Manchester, South and West Yorkshire and the West Midlands all experiencing large falls, according to Resolution Foundation analysis.
The analysis shows that having peaked at 71% in 2003, the proportion of people owning their own home across England has fallen steadily over the last decade by 8%. It suggests that the widely reported increase in home ownership in 2014 was likely a blip to correct a sharp fall the year before, rather than a welcome reversal of a long standing trend.
The Foundation says that while much of the discussion around the struggle to buy a home has centred on London, Greater Manchester has actually recorded the sharpest fall in home ownership of any major city area in the last decade or so.
Stephen Clarke, Policy Analyst at the Resolution Foundation, said: “London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the North of England.
“The chances of owning a home have fallen fastest in Greater Manchester over the last decade, though the Leeds and Sheffield city areas have also experienced sharp drops.
“These drops are more than a simple source of frustration for the millions of people who aspire to own their home. The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.
“We cannot allow other cities to edge towards the kind of housing crisis that London has been saddled with. It’s encouraging that the new Prime Minister has talked about tackling the housing deficit. She may find that making good on this promise could secure as important a legacy as negotiating a successful exit from the European Union.”
This fall in home ownership has corresponded with a near doubling in the proportion of private renters across England, up from 11% in 2003 to 19% in 2015. The proportion of households renting privately in Greater Manchester has more than trebled over that period – from 6% to 20%.
The Foundation said the shift from home ownership to private renting is concerning for a number of reasons.
It notes that households in the private rented sector spend a far higher share of their income on housing than those who own with a mortgage (30% compared to 23%), helping to explain the fact that the share of income that households spend on housing across the UK has increased by around a quarter since 2003 (and by around a third in the North West).
Charles Haresnape, Aldermore’s Group managing director, mortgages, said of the analysis: “Today’s research reflects the changing nature of the British housing market and only highlights the important role that private landlords play in meeting the needs of tenants. Britain now has the fourth lowest level of home ownership in the EU after it was overtaken by France for the first time since records began 20 years ago.
“As our own figures show, initiatives such as the Help to Buy Scheme have benefited first time buyers from across the country, not just in London and the South East.
“However, the number of properties in Britain worth £1m or more is set to more than triple by 2030, and if the Government is keen to support homeownership then meeting and exceeding housebuilding targets must be a priority for the new housing minister. Progress has been made in recent years around updating the planning laws and regeneration of brownfield sites, but we need to also look at issues such as access to finance for small developers and building on areas of the greenbelt.”