The number of homeowners has fallen this year while more people are renting privately, according to a new government report.
The English Housing Survey 2015-2016, which looks at owner-occupation and the social and private rented sectors, has revealed that of the estimated 22.8 million households in England, 14.3 million, or 62.9%, were owner-occupiers. This is down from 63.6% last year - the lowest share of tenure since 1985 and significantly down from its peak of 70.9% in 2003.
An interesting statistic to come out of the data is that while the number of owner-occupiers continues to decline, there are now more people who own their home outright. Out of that group, the number of households with mortgages fell by 252,000 to 6,598,000. In 2015-16, 34% of households were outright owners while 29% had a mortgage.
The survey, published by the Department for Communities and Local Government, says this change is partly explained by an ageing population, with many baby boomers reaching retirement age and paying off their mortgages. Older mortgage-free households rose by 258,000 in a year, to 7,732,000.
The survey also found that more people continue to rent privately than are in the social rented sector.
In 2015-16, the private rented sector accounted for 4.5 million or 20% of households, while the social rented sector accounted for 3.9 million or 17% of households.
Private renters spend more
The survey revealed that private renters spend much more of their income on housing costs than social renters or those buying with a mortgage. Those buying their home with a mortgage spent 18% of their household income on mortgage payments, while rent accounted for 28% of household income for social renters and 35% of household income for private renters.
Commenting on the new figures, Lucian Cook, head of residential research at Savills, says: “The continued rise in under-occupation among homeowners reflects growth in mortgage-free homeownership and reluctance to downsize. This continues to put pressure on our housing stock and means that housing delivery isn’t just a numbers’ game, it is also about providing the right type of housing in the right locations, particularly for downsizers.
“These figures support calls for the inclusion in next week’s Budget of measures to encourage downsizing in order to free up under-occupied homes, and an exemption from the 3% additional homes stamp duty levy for the build-to-rent sector to boost the delivery of much needed rental housing.”