Rate of home ownership in England at lowest level for 30 years
After rising almost continuously over the course of the twentieth century, the rate of home ownership in England has been declining steadily since 2003, the annual housing survey shows.
The report published by the Department of Communities and Local Government shows that in 2013/2014 home ownership fell from 65.2% to 63.3% and is now at its lowest rate for almost 30 years.
Indeed it is some 8% below the all-time high of 70.9% in 2003 and among owner occupiers, the proportion of people owning their home outright overtook the proportion owning with a mortgage in 2013/2014.
The data reveals a sharp decline in the proportion of younger people owing their own home, particular those aged 25 to 34 who are traditionally first time buyers who are vital to the housing ladder. But the number of this group owning their own home fell from 59% in 2004 to just 36% in 2014.
Over the same period, the proportion renting, either privately or through a local authority or housing association, increased from 41% to 64%. For 16 to 24 year olds, the proportion renting increased from 76% to 91%.
The increase has occurred in the private rental sector, which currently houses 19% of total households in England, the highest share since the 1960s. Indeed, over the last decade the number of privately rented households has nearly doubled to 4.4 million, while the percentage of households in social rental properties has declined from 18% to 17%.
The survey suggests that 25% of people in social housing and 61% of those in the private rental sector expect to be able to buy their own home in future. However, this remains a longer term aspiration, with around half of renters expecting it to take five years or more to take their first steps into the housing market.
The survey lays bare the generational divide in housing with older households continuing to benefit from the growth in home ownership and accumulation of equity in the second half of the 20th century, with younger households suffering from a lack of access to home ownership in the 21st, according to Lucian Cook, head of residential research at Savills.
‘We urgently need a co-ordinated, long term response to the housing crisis rather than short term populist policies that only address a few of the symptoms. A new government will need to front up to the need to provide a bigger, better private rented sector and find ways to encourage the recycling of existing housing wealth so younger households can get on and trade up the housing ladder,’ he said.
Savills forecasts that number of private rented households will continue to rise, while levels of owner occupation will continue to slide as higher interest rates, greater mortgage regulation and an acute housing shortage further reduce access to mortgaged home ownership.
The firm estimates that by the end of 2019 there will be more than six million private rented households, 24% of all homes in England and Wales and by 2019, private renting will account for two thirds of all households across England and Wales, where the age of the household reference person is under 35.
At the same time, there are expected to be over half a million fewer owner occupied households in this age group, meaning that just 16% of under 35s are expected to be living as owner occupiers, down from 28% in 2014.
Similarly, numbers of 35 to 49 year olds in private renting almost doubled from 2001 to 2011, to account for one in five households nationally. By 2019 Savills forecasts that there will be over 2 million private rented households in this age group, an increase of over 30%.
In London, a quarter of a million more households are forecast to be private renters by 2019, taking the total to 1.24 million, some 36% of all households. Owner occupied household numbers will fall by 100,000 to 1.46 million, or just 42% of the total, according to Savills forecasts.
By contrast, the over 65s are the only age group where numbers of private renters are forecast to fall, by 42,000, as owner occupation in the generation continues to rise. Around 80% of over 65s are expected to be owner occupiers by 2019, occupying over five million homes with very low levels of outstanding mortgage debt.