As we see a spike in private renting, home ownership has fallen to the lowest level since the 1980s. 19% of households now live in privately rented accommodation, which is the highest proportion the UK has seen since records began.
Coinciding with this, there has been a significant fall in the amount of households living in Social housing. This has fallen from over 50% in the 1980s to just 16.8% today. There are now over 4 times as many people privately renting than in social housing.
As seen in the graph below, home ownership peaked in 2003; when over 70% of households were owner-occupied. Since then this percentage has been slowly decreasing. In 2012-13, according to the English Housing Survey, the amount of owner occupied households had fallen to just 65%.
In the 1980s and 1990s, the amount of properties being privately rented remained at a steady 10%. However over the past 30 years, private renting has seen a sharp growth, thought to be driven by factors such as rent controls. Increasingly over the last 10 years homeownership has become a distant dream for young couples. House prices have risen and banks have severely restricted lending, creating a generation who now look at renting as a long term solution and no longer have expectations to become homeowners.
The government has introduced a policy inspired by Thatcher’s Right to Buy Scheme (Introduced in the late 1970’s enabling those who lived in social housing to buy their home at a discounted rate). The Help to Buy initiative was introduced in October 2013 and offers first time buyers the opportunity to apply for a mortgage with as little as a 5% deposit.
With house prices in the UK averaging at £250,000, and in Oxford £368,864, the government is hoping that the Help to Buy scheme will get Britain back into homeownership. The scheme enables couples who have previously been unable to pull together a sufficient deposit to get on the first run of the property ladder.
How this will affect the rental market is yet to be seen, however we shall keep you up to date as with any changes as and when they happen.