According to recent data, levels of UK homeownership have fallen to 62.9%, the lowest level since 1985 and down 0.7% from the previous year.
Figures from the English Housing Survey have indicated that in comparison to the peak of 71% reached in 2003, homeownership has fallen by 8%.
There have been a greater number of outright owners than mortgagors since 2013-14, with the proportion of mortgagors declining even further from 31% in 2013-14 to 29% in 2015-16.
The growth in outright owners (to 34% in 2015-16), according to the government, is partially down to the UK’s ageing population. Having reached retirement age, baby boomers are paying off their mortgages and moving into outright ownership.
In contrast, the private rented sector has doubled in size since 2004, now accounting for over 20% of households (4.5 million.)
On average, for those purchasing a home with a mortgage, 18% of their household income was spent on mortgage payments. For those who rent, however, 28% of household income was paid by social renters, whereas private renters paid 35% of their household income.
Commenting on the survey results was John Goodall. The CEO and co-founder of Landbay stated: “As house prices rise further out of reach of aspiring homeowners, home ownership levels have dwindled. Generation Rent is growing both in volume and household size, with people now more likely than ever to be in rental accommodation not just as young adults, but also as they begin and grow their families. This is a growing problem in London particularly, where space is already at a premium. Tenants in the capital are paying a premium for larger properties, three times the national average in fact, according to the Landbay Rental Index.
“Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, more people than ever are reliant on a well-served buy to let market to ensure price growth doesn’t become unbearable. Last month’s Housing White Paper was a promising sign that the private rented sector may finally start to be given the investment and attention it needs to prevent the market from boiling over. Hammond’s upcoming Budget is the perfect opportunity to now deliver his commitment to build-to-rent developments, prioritising the areas in the UK that need them the most.”
