In the wake of house prices rising in recent years, the UK now has the fourth lowest rate of home ownership in the European Union, according to official figures.
However, as further research has revealed that buying property in one-sixth of British cities is now more affordable than renting, the downward trend in homeownership could be nearing an end.
Published by EU statistics agency Eurostat, the most recent comparable figures indicate that from the 28 member states, only Demark, Austria and Germany have lower owner-occupancy rates than the UK.
Across the EU, just below seven in ten people (69.5%) during 2015 were living in owner-occupied homes.
The figure in the UK was just 63.5%, a fall of nearly one percentage point since 2015.
The highest rates of ownership are found within Romania at 96.4%, followed by Croatia, Lithuania and Slovakia which are all around 90%.
Known for its culture of renting, Germany has the lowest rate of owner-occupancy in the EU, with 51.9% of people living in properties owned by themselves or their family.
The shadow housing secretary, John Healey, stated: “Home ownership for young people is in freefall – in many parts of the country there’s now a crisis.”
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Homeownership in Britain, contrasting to Germany, is seen as a mark of economic progress; a “property-owning democracy” was the election-winning pledge of Margaret Thatcher.
However, the first fall in a century for home ownership was shown in the last UK census, which recorded a particularly significant fall in rates among younger people.
Dropping from 2001’s figure of two million, the number of 25 to 34-year-olds owning their own home was recorded at 1.3 million just ten years later.
Although the UK’s younger generation are commonly referred to as ‘generation rent’, new figures from Zoopla have indicated that the movement towards renting could be changing its course.
Comparing the monthly cost of servicing a mortgage on a two-bedroom home against renting, the figures gathered from Britain’s 50 biggest towns and cities indicated that in 60% of areas, buying is now cheaper than renting.
In Glasgow, the gap between a standard mortgage repayment and monthly rent cost is 28%, meaning homeowners are faring significantly better. The so-called “rental premium” equates to £146 per month in monetary terms.
Birmingham’s homeowners pay 24% less per month in comparison to renters (£176), whilst the gap in Bradford is a monthly sum of £103 or 23%.
In the southern half of the UK however, renting remains the cheaper option. A typical rent in London stands at a monthly cost of £2,009. This is 44% or £1,118 less than the average monthly mortgage repayment.
Zoopla’s Lawrence Hall commented on the findings, mentioning that despite the unaffordability in some areas, buyers are offered better value on the whole.
“Buying a property is a costly process, but once you get past the initial fees, it can – as our data shows – prove a more economical option on a monthly basis.
“Although large parts of Britain remain unaffordable for those looking to take their first steps onto or another step up the property ladder, these latest figures tell an encouraging story.
“Whereas back in April it was cheaper to service a monthly mortgage than pay a rental fee in just under half of Britain’s biggest cities, buyers are now offered better value in nearly two-thirds of these locations.”
