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Home ownership in England at 30 year low, says government report

English Housing Survey shows home ownership is the lowest level since 1985 with the private rental sector doubling since 2002.

In England home ownership has fallen to the lowest level in 30 years and the English Housing Survey, a government produced report for 2015-16, shows 62.9% or 14.3 million owned their home of the total 22.8 million UK households.

This is the lowest proportion since 1985 as the number of owner occupiers increased steadily from the 1980s reaching a peak of 70.9% in 2003.

In contrast the number of private renters has increased from about 10% in the 1980s and 1990s to 20% accounting for 4.5 million of households, almost double the 2.3 million in 2004.

This reflects the difficulty for first time buyers struggling to secure the larger deposit or higher earnings required to purchase their first home.

Decade of changing tenure

Over the last ten years there has been a shift with declining home ownership in and out of London and a rise in renting.

For both in and out of London the fall in owner occupation was driven by declines in the proportion of mortgaged properties and the steady rise in house prices may also have contributed to this decline.

Outside of London the proportion of outright owners has actually increased from 32% to 36% although no increase was observed in London.

For 2015-16 on average 34% of households were outright owners with 29% owned their homes with a mortgage.

Home ownership including first time buyers, home movers and remortgage buyers in London is 49% compared to 65% in the rest of England and this is generally due to a younger age profile of the population in the capital.

For home movers leaving London with the highest rising property values to areas with lower growth, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.

The English Housing Survey shows the number of people in the private rental market has always had a bias towards younger people and this has changed significantly in the past decade.

During 2005-06 the proportion of young people aged 25-24 privately renting was 24.2% and this has increased to 46.1% while the cost of renting outside London is £153 per week compared to twice that in the capital of £300 per week.

With competition from buy-to-let investors and reduced supply of suitable properties, prospective home buyers must continue renting and saving for a bigger deposit.

Property wealth related to age

There should be no surprise that outright owners were concentrated in the older age bands with 61% of households aged 65 or over and have the greatest opportunity for property wealth.

This has resulted in a rise of the equity release mortgage buyer where older homeowners can access the wealth in their property to maintain their lifestyle while remaining in their home.

This compares to households with a mortgage where 62% were aged 35-54 and about 67% of households in private rented property were under 45 years of age.

Over the last decade the proportion aged 25-34 years buying a home with a mortgage has decreased from 53% to 35% and therefore the opportunity for younger people to acquire property wealth is less.

In 2015-16 there were 654,000 first time buyers compared to 675,000 a decade earlier with the average age increasing only one year to 32 years of age and in London they were aged 33 year, again one year older.

Of those buying 64% were aged 25-34 years with only 8% under age 24 while 29% were aged 35 or more in 2015-16.

For mortgages the term selected is becoming longer with half choosing 20-29 year mortgages and 40% with a 30 years or more.

Finally 64% of first time buyers paid a deposit of less than 20% of the purchase price of the property and only 6% bought their home outright.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the equity release mortgage calculator, property value tracker chart and mortgage costs calculator. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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