Home ownership falls to lowest level in 25 years

Landlord Expert
By Landlord Expert November 16, 2012 08:48

Homeownership is "in crisis" in the UK, with owner-occupation falling to its lowest level since 1988, according to a report published by lobby group the HomeOwners Alliance.

The HOA says the owner-occupation rate peaked at 69.7% in the UK in 2002, falling to a current 64.7%. That rate is the 17th highest among the 27 EU countries, and lower than that of Bulgaria, Ireland, Italy and Romania.

There are now about 5 million households locked out of the property market as a result of housing shortages and high house prices. Having been forced into the rental market, sky-high rents mean they are unable to save the funds needed 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, with less than half of properties in the city now owner-occupied, the lowest level since figures for the capital began in 1991.

The latest LSL Property Services buy-to-let index, also published on Friday, shows that the average monthly rent across England and Wales hit an all-time high of £744 in October 2012, the seventh month in a row of rent increases. On an annual basis rents in London have risen by 7% to £1,102 – easily more than double the rate of inflation.

Paula Higgins, chief executive of the HOA, said: "This decline in homeownership 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."

She warned that the social consequences were "profound and long-lasting": poverty among pensioners and children would rise, social inequality worsen, and more people would face 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 homeownership will decline."

Owner-occupation remains by far the most desired form of housing tenure in the UK. According to the latest British Social Attitudes survey, 86% of Britons want to own their own home, including those who live in social housing.

Landlord Expert
By Landlord Expert November 16, 2012 08:48

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