“Home ownership in England has fallen to its lowest level in 30 years as the growing gap between earnings and property prices has created a housing crisis that extends beyond London to cities including Manchester.
The struggle to get on the housing ladder is not just a feature of the London property market, according to a new report by the Resolution Foundation thinktank, with Greater Manchester seeing as big a slump in ownership since its peak in the early 2000s as parts of the capital, and cities in Yorkshire and the West Midlands also seeing sharp drops.
Home ownership across England reached a peak in April 2003, when 71% of households owned their home, either outright or with a mortgage, but by February this year the figure had fallen to 64%, the Resolution Foundation said.
The figure is the lowest since 1986, when homeownership levels were on the way up, with a housing market boom fuelled by the deregulation of the mortgage industry and the introduction of the right-to-buy policy for council homes by Margaret Thatcher’s Conservative government. …
… Lindsay Judge, an expert on housing at the thinktank, said the problem was one of affordability. “House prices began to outpace earnings in the early 2000s,” Judge said. “When the market fell so did earnings – house prices began to come down but so did people’s pay, or it was stagnating at best, so few people were able to make the most of falling prices.”
The analysis showed that across England levels of private renting almost doubled from 11% in 2003 to 19% in 2015, while in Greater Manchester the figure more than trebled, from 6% to 20%.
The Resolution Foundation said this shift in tenure could mean problems in the future, as individuals would need to find a way of funding their housing in retirement, or may need to turn to the benefits system for help. Clarke said: “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.”
Anne Baxendale, head of policy and public affairs at the housing charity Shelter, said house prices were now “completely out of step with average wages”.
She added: “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. …”n