Homeownership declines across UK
The number of people owning a home across the UK has fallen since its peak in 2004, with northern cities particularly hard hit, research by a think tank has revealed.
Analysis from the Resolution Foundation has found that homeownership in the UK fell to 64% in February 2016, down from its peak of 71% in October 2004.
Regionally the breakdown is as follows:
- In England, homeownership fell to 64% in February 2016, down from its peak of 71% in April 2003.
- In Northern Ireland, homeownership fell to 63% in February 2016, from its peak of 74% in November 2006.
- In Scotland, homeownership fell to 64% in February 2016, down from its peak of 69% in October 2004.
- In Wales, homeownership fell to 70% in February 2016, down from its peak of 75% in May 2006.
Greater Manchester recorded the sharpest drops of any city in England. At its peak in April 2003, 72% of homes in the area were owned – just a little more than the English average at the time. But since then, homeownership in Manchester has declined by 14 percentage points – almost twice as fast as it has in England, where it dropped by 7% over the same period. By February 2016, just over half (58%) of homes in Manchester were owned.
The report found that homeownership rates have declined in all large northern city areas since their peaks.
It adds that Outer London, West Yorkshire, and the West Midlands Metropolitan Area have all experienced double-digit falls since the early 2000s.
More private renters
While homeownership has declined, the proportion of private renters in England has risen from 11% in 2003 to 19% last year.
In Greater Manchester, the number of private renters has gone up significantly, from 6% to 20%. Outer London and West Yorkshire have also recorded double-digit growth.
The foundation points out that households in the private rented sector spend a higher proportion of their income on housing than those who own with a mortgage at 30% compared to 23%. It also says that tenants will suffer from greater insecurity linked to short-term contracts.
The findings come in the wake of last week’s English Housing Survey report, which revealed that two-thirds of private and social renters said that affordability was a barrier to homeownership. It found that just 1% prefer the flexibility of renting to home ownership.
‘Shift to renting can reduce living standards and future wealth’
Stephen Clarke, policy analyst at the Resolution Foundation, says: “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.”
‘Exceeding housebuilding targets must be a priority’
Charles Haresnape, group managing director of mortgages at lender Aldermore, says: “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 £1 million 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.”