As the gap widens between incomes and property prices and the housing crisis continues, home ownership in England has fallen to its lowest level in three decades.
Expanding beyond London and into other major UK cities, the housing crisis means that
According to a new report by the Resolution Foundation thinktank, Greater Manchester has seen a large decrease in ownership since the early 2000s, with other cities in Yorkshire and the West Midlands also seeing a significant drop.
In the early 2000s, building societies and banks were keen to lend, buyers were able to take out mortgages without a deposit and property prices averaged at around £122,748 according to Nationwide Building Society.
Due to this, homeownership rose as buyers rushed to get on the property ladder before the prices became unaffordable.
In April 2003, home ownership peaked, when 71% of households owned their homes or were paying off a mortgage.
According to Nationwide, the average price of a UK home rose to £196,930 in February this year – showing a 60% percent increase in the last 13 years.
However, as properties became more expensive and the housing market crashed after the 2008 credit crunch, the downward trend continued.
In a dramatic contrast to the 71%, the Resolution Foundation report shows that in the early months of 2016 only 58% of households in both Greater Manchester and in London were homeowners.
Other areas in Yorkshire and the West Midlands have also seen double figure drops and the number of people who own their own home has fallen across all parts of the UK since the 2003 peak.
Policy analyst at the Resolution Foundation, Stephen Clarke said:
“London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the north of England.”
The analysis also showed that private renting in England has almost doubled from 11% in 2003 to 19% in 2015, while in Manchester the figure rose from 6% to 20%.
The shift towards renting tendencies could cause problems in the future, as renters would have to find a way of funding their housing when they retire, or may turn to benefits system for the added support.
“The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state. We cannot allow other cities to edge towards the kind of housing crisis that London has been saddled with.” Said Clarke.
Anne Baxendale, head of policy and public affairs at Shelter stated:
“Sky-high rents are leaving many families struggling to make ends meet each month, let alone save up enough for the deposit on a home. Far from being the stepping stone it once was, many young people and families are now facing a lifetime stuck in expensive and unstable private renting.”
“The new government has a real chance to give hope back to these families by tackling the root cause of the housing crisis and building genuinely affordable homes that people on ordinary incomes can actually afford to rent or buy.”
Findings from the Resolution Foundation’s analysis and statements from housing charities and campaign groups highlight the pressures on new Prime Minister, Theresa May, who pledged to deal with the housing deficit last month.
“Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced. And more of the country’s money will go into expensive housing instead od more productive investments that generate more economic growth” said May.