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TODAY'S OTHER NEWS

Low ownership rates fuels rental demand

Home ownership has fallen to its lowest level for 30 years in England, with rising prices leaving many people with little alternative but to rent from private landlords.

While affordability remains a major issue in London, the analysis by think-tank the Resolution Foundation revealed that there have been double-digit falls in ownership across Leeds, Sheffield and in Greater Manchester, where it said ownership levels had dropped the most, falling by 14.5% from their peak of 72.4% in April 2003 to 57.9% in February this year

The report said that outer London saw the second largest drop - of 13.5% - to just below 58%.

The Foundation said the figures showed the proportion of people owning their own home had plummeted across every part of the UK since their peak in the early 2000s, fuelled largely by the fact that house prices have increased sharply to an average of £227,000 in England during times of weaker wage growth and lower supply of new housing.

The Foundation released its report a week after the English Housing Survey found two-thirds of private and social renters cited affordability as a barrier to home ownership.

Stephen Clarke, policy analyst at the Resolution Foundation, 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 fall in homeownership levels has coincided with a significant increase in the number of people renting from private landlords, which is now at a 30-year high. 

Findings from think-tank ResPublica last year found that 22% of households were renting from private landlords, up from 9% in 1985.

“At the moment we are failing to extend economic ownership to everyone, ownership is an unrealisable dream for too many,” said Phillip Blond, director of ResPublica.

“Welfare has failed to save the poor from their lot, only the possibility of mass ownership offers the possibility of ending poverty, this is our dream and this should be the aim of all our policy,” he added.

If renting in the private sector continues to grow, as widely anticipated, the marked decline in the number of people owning property is likely to fall further.

“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,” said Anne Baxter, head of policy and public affairs at the housing charity Shelter.

  • Amanda Brown

    I can't help wondering why Manchester has seen the biggest switch over from home ownership to renting, when you can buy a two bedroom house there for £50k? Especially as Manchester has also seen an enormous growth in business and employment in recent years. Any ideas?

  • Mark Hempshell

    I think there are much bigger social changes afoot here other than it is just 'too expensive to buy' in cities. Over the last 30-40 years or so many people who lived in the inner cities have moved out to the 'greener' suburbs, as has much of the industry that employs them. That has left a lot of very affordable inner city property which investors have bought up. It's not entirely accurate to put all this forward as an example of the housing affordability crisis.

  • MARJORIE PENNINGTON

    One of the problems in large cities like Manchester and Leicester is that there are hundreds of thousands of student who need accommodating and people are happy to supply this, but it takes an awful lot of properties of the market that might have been made into flats etc.
    Students in Leicester can pay as little as £80 a week, all bills included so why cannot similar accommodation be supplied to sell - the price would in the long run be higher because of the ongoing maintenance charges but it would provide a first step on the housing ladder and make young people aware of the costs etc. Students pay no poll tax.

  • MARJORIE PENNINGTON

    When I was young we did not have a car, go out to nightclubs every weekend , go binge drinking, take drugs or have a wardrobe of clothes so big they were kept in cases and bags. Young people now want everything and think it is their right but it isn't.
    When I bought my first run-down property the interest rates were 12% and we had no help from the government or family and my first wardrobe was a packing case but with hard work I've never looked back.

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