Making Sense of Home Ownership Figures
The most recent English Housing Survey figures show home ownership has reached a 29 year low. Of the 22.6 million household within England, 63 per cent are today owner-occupied. This represents the lowest level since 1986 and is the eleventh successive year in which home ownership has dipped. The private rented sector has benefitted greatly from the down-shift in owner-occupation, with 4.4 households now being renting their home, an 18 per cent increase from the 2012/13 research.
The demographic group of 25 to 34 year-olds are the most likely to rent their home, making up 48 per cent of the sector, an increase from 45 per cent in the period 2012/13 and a doubling on the 2003/4 figure of 21 per cent. Owner-occupation in the age group in the same time has declined from 59 to 36 per cent.
Making sense of the figures isn’t as straightforward as it may seem, though. When the report was released there were calls from agents and pressure groups about the threat of home ownership becoming something for the privileged few only. The HomeOwners Alliance exists in the UK solely to promote home ownership as an integral part of social progress, and described the decline in owner-occupancy as a significant social ‘crisis’.
And no doubt the figures do reflect a significant problem. Too few homes are becoming available to meet demand. This much has been clear for decades, despite the pledges of successive governments. The official statistics for new builds in 2014 show that less than half the 250,000 new homes required annually to keep up with demand were built, with only 118,760 being achieved. This pushes house prices up, takes deposits beyond the reach of many young families, and means greater reliance on rented properties.
Nevertheless, the drop in owner-occupancy isn’t all bad news. It should be remembered that the UK is rare within Europe in placing an emphasis on home ownership. In countries such as France and Germany renting is much more normal for families, with no decline in their quality of life.
The figures also reflect a cultural shift in England. The old norm of couples settling down in their twenties and buying a home has largely disappeared. In 2012 the average marital age for men was 36.5 and for women 34. In 1970 it was 22 for women and 24 for men. There’s a greater focus on career-building and travel for young people today, rather than buying a home.
There are also major regional differences in the property market that are masked by the figures. In the major cities properties may be unaffordable for many, but prime locations have always beyond the means of first-time buyers. The likelihood is that new areas where prices are less prohibitive will become increasingly popular. The market tends to be resilient and adaptive.