There are signs the government may drop its focus on homeownership in response to the referendum’s economic impact and the apparent slowing down of the housing market. But is the real choice between assisting homeowners and helping tenants? Or might we get the best of both worlds? As recently as 2008, a quarter of the tenants who became first-time buyers came from social housing and building more homes to let at social rents may be a path to boosting homeownership as well.
The headlines were recently grabbed by the fall in homeownership from 71% to 64% in little more than a decade. But if we break this down further there’s a more compelling story. The number of households buying with mortgages declined even further – from 41% to just 30% over the same period. It is this fall in purchases with mortgages, which typically involve younger households, that led to the overall fall in homeownership. The proportion of households with paid-off mortgages, who we can logically assume are older, actually increased slightly from 30% to 33%.
There’s no doubt the ‘crisis’ of declining owner-occupation is mainly affecting the young. As a consequence, nearly three million households in the under-44 age group are now private renters, compared to just 1.3 million in 2003/4.