Home ownership falls as people turn to renting

Home ownership has declined to 64% among households in England and Wales, with numbers of private tenants sharply up, according to the latest Office for National Statistics figures.

Working to the results of the 2011 census, the ONS says that 14.9m households owned – either outright or with a mortgage – their own homes last year, a decrease of 4% since 2001.  In London, home ownership has fallen to the extent that in inner London, only just over one-third of homes are owned. In Hackney, the lowest level of home ownership in the country is recorded at just 26.1% of households.

The fall in home ownership across England and Wales is entirely due to the decline in the number of households buying through a mortgage, as figures show the number of people owning their own homes outright has gone up.

A total of 31% of the population in England and Wales now own their own home outright, compared with 29% ten years ago (7.2m compared with 6.4m).

Unsurprisingly, the number of people renting privately shot up over the same period from 1.9m to 3.6m – meaning that 15% of the population now rent, up from 9%.

The population in March 2011 was 56.1m, a 7% increase equating to 3.7m people, from 2011.

Foreign-born residents living in England and Wales increased from 4.6m in 2011 to 7.5m last year, and one in six of the total population in England and Wales were aged 65 or over (16% or 9.2m people).

Ben Thompson, managing director of  Legal & General Mortgage Club, said: “Home ownership as a percentage has decreased over the last decade for a variety of reasons.

“Firstly, through the early noughties we saw rising house prices: whilst this was good for many existing home owners, it merely raised the bar too high for some first-time buyers.

“We also saw Stamp Duty levels rise significantly relative to historical levels.

“In 2007 we saw the onset of the credit crunch, and in the years that have followed mortgage availability has fallen, and in particular underwriting criteria have tightened markedly. In short, for many, it is near impossible to secure a mortgage.”

He added: “It is the private rental sector that is absorbing this shift and providing alternative rental options. Private landlords are playing a very important role at the moment and this is likely to last for some time.”