Just Over One Third Of Adults Under 35 Own A Property
In the past ten years the number of younger home owners has decreased by a third according to a recent report published by the Ministry of Housing, Communities and Local Government (MHCLG).
Nowadays, only 38% of people under the age of 35-years owns their own property. However, this figure has shrunk from 55% a decade earlier.
Reassuringly, there has been more success for people over the age of 55-years In 2017/18. 57% of people aged 35 to 44 were able to purchase their home, an increase of 5% from the 52% of people in this age bracket a year earlier.
Whilst 64% (14.8 million) of the 23.2 million household in England are now owner occupier, the plight for the younger generation is only getting worse. Whereas 28% of 25 to 34-year-olds rented privately in 2007/08, this figure has been gradually increasing ever since and has now surpassed 44%.
Overall, the privately rented sector is now worth 19% of households or 4.5 million properties.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “As owner occupation rates show little change for the fifth year in a row, we continue to see the effects of the affordability issues facing borrowers looking to move onto and up the housing ladder. Although mortgage rates remain low, which should support borrower affordability, high house prices and regulatory constraints on lending continue to represent barriers for borrowers wanting to move onto or up through the housing ladder. As such, the IMLA expects a relatively flat year for mortgage lending growth in 2019.
“While the overall rate of owner occupation is static, the Housing Survey found that the number of outright owners is now much higher than that of households buying with a mortgage. This is symptomatic of a market which is undergoing a profound structural shift, with a larger share of the funds used to purchase property coming from cash and injecting equity into the housing stock, an unusual occurrence in a non-recessionary period.
“In this continued subdued period, more than a decade on from the financial crisis, perhaps it’s an opportune moment for policy makers and regulators to reassess the costs and benefits of the present regulatory structure. We must recognise that the costs for those who continue to be locked out of homeownership can be considerable and lasting.”
The higher number of 25 to 44-year olds renting is a sign that some are not able to afford the first step onto the property ladder, but also of others actively choosing to rent, according to
John Goodall, chief executive officer of lender Landbay, commented: “The lifestyle that renting can offer is much more attractive to many people who may choose to sample many locations, work in different places, or spend time abroad. The flexibility that comes from having a lease, the support when things go wrong and the lack of responsibility of owning a property all add up.
“Now more than ever, all eyes are on the Government to encourage meaningful investment in the sector, and to stop penalising landlords with extortionate stamp duty. In these turbulent economic times, the sector needs to be encouraged to grow rather than stifled.”
What needs to be done to help more people under the age of 25-years -old gain a foothold on the property ladder?