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Homeownership decline predicted

Sarah Davidson

December 10, 2010

RICS said owner occupier rates look set to fall across all three countries as their economies slow.

In the UK the owner-occupier rate has already dropped from its peak in 2003 of 71% to 68% this year.

Spain has seen the largest drop in home ownership, with the current rate 10% below the peak of 92% achieved in 2002. In the US, home ownership has been fairly modest, falling 2% from its peak of 69% in 2004.

Despite recent falls in house prices, RICS believes the combination of tight lending constraints and a generally uncertain economic environment will contribute to a further shift in tenure in the UK over the next few years, with owner occupier rates continuing to edge lower at the expense of private lettings.

Himanshu Wani, economist at RICS, said: “The downward trend in owner occupier rates that started in the middle of the last decade looks set to continue.

“With first-time buyers struggling to take an initial tentative step on housing ladder partly because of lenders demands for larger deposits, more potential purchasers are likely to choose the rental option and delay buying a property until they are in a stronger financial position to do so.

“Indeed, the latest RICS UK lettings survey shows tenant demand continues to increase and that this is now feeding through into rising rents.”


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