UK homeownership slumps to lowest level in 24 years
Paula Higgins writes: Today we published our first report, “The Death of a Dream: the crisis in homeownership in the UK". It examines the shocking decline in homeownership over the past decade and forms the basis of our campaign to ensure that homeownership does not become the preserve of the wealthy.
November 16, 2012
Making use of unpublished government data we reveal that homeownership in the UK peaked 10 years ago, before sliding to a point where a generation of young people face being locked out of the housing market for good.
London has been worst affected, with most people in the capital now renting. Just under half of properties in the city are now owner-occupied, the lowest level since records began in 1991.
Official figures have revealed that the high point in homeownership in the UK was 2002, when 69.7% of households were owner occupied. The rate has plummeted since then to a low of 64.7%, a level last seen in 1988, when Mrs Thatcher was promoting ‘the right to buy’. This slump in owner occupied properties has resulted in a 1.4 million fewer homeowners than otherwise would have been the case, had the previous trend continued. By 2016, that shortfall is estimated to jump to 2.4 million.
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. The report also reveals a ‘homeownership gap’ of about 5 million households – people who want to live in their own home, but have to rent instead. Buying your first home is no longer a joyful rite of passage for young adults, but returning to being a privilege of elites.
The social consequences are profound and long lasting: poverty among pensioners and children will rise, social inequality worsen, with more and more people face life in insecure rented accommodation. Without urgent action, the government also faces a rocketing welfare bill, as housing benefit costs soar.
The causes of the current crisis are deep. Mortgages remain out of reach because the deposits required by lenders have soared. The gap between what people earn and house prices in the UK is among the worst in the world. At the heart of the problem is a chronic shortage of new homes.
International comparisons confirm that the UK’s standing as a nation of home owners is under threat. It has now slumped to 11th from bottom in the EU for home owning levels, below countries such as Romania, Portugal, Ireland, and Bulgaria.
Reversing the decline in homeownership should be one of the government’s highest priorities.