‘National crisis’ as home ownership hits a 30-year low

HOME ownership in England is at its lowest level in 30 years as runaway house prices and slow wage growth have left millions unable to fund a deposit, a report revealed last night.

MPs said the housing crisis is becoming a ‘ national emergency’.

The report, by think-tank The Resolution Foundation, found only 63.8 per cent of people in England own a property.

The figure was 70.8 per cent in April 2003, when home ownership peaked, and is the lowest since 1986, when the rate was 63.5 per cent and Margaret Thatcher began allowing council tenants to buy their homes.

But despite London’s inflated house prices, the most dramatic drop has been in Greater Manchester and other northern cities such as Leeds and Sheffield.

Of Manchester residents, 57.9 per cent are home owners, compared with 72.4 per cent in April 2003. This is despite the average home in the Manchester area costing £146,381, less than a third of a typical home in London, according to the Office for National Statistics.

In Yorkshire and Humberside, which includes Leeds and Sheffield, just 68.7 per cent own a home, down from 78.1 per cent in October 2005.

In the West Midlands, including Birmingham, the rate has fallen from 70.5 per cent in April 2005 to 59.3 per cent.

The Resolution Foundation warned the figures show the ‘fully blown housing crisis’ in London could spread throughout the UK unless the government builds more affordable homes across the country.

It added that the surge in the number of people forced to rent means more families face ‘greater insecurity’ and financial hardship when they retire.

Stephen Clarke, policy analyst at the Resolution Foundation, said: ‘London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in the cities across the North of England .

‘The shift to renting privately can reduce current living standards and future wealth, with implica- tions for individuals and the State.’ MPs and The Resolution Foundation suggested the big drop in home ownership outside London reflects a shift towards part-time work, including zero-hour contracts – which make it harder for people to secure a mortgage.

Last night Liberal Democrat leader Tim Farron said: ‘ The housing crisis is turning into a national emergency.

‘Wages are being squeezed and with the rise of zero hour contracts the bank of Mum of Dad is being stretched to breaking point. For millions of young people the chance to get the excitement of being handed over the keys to a home they can call their own is just that – a dream that is fading away fast.’

Chris Leslie, Labour’s former shadow chancellor, described the slump in homeownership as ‘depressing’.

He said: ‘This is a blow to the aspirations of working Britain.We should be supporting the dreams of people wanting to get on the housing ladder.

‘But there is inadequate support for housebuilding, and we need to stimulate the construction sector.

‘Stretched to breaking point’

It’s also getting more difficult to get a mortgage because the UK is moving towards a ‘gig economy’ where more people are offered short term contracts. This makes it harder for people to persuade banks that they are in long-term stable employment.’

Despite Government initiatives such as Help to Buy, the number of first- time buyers relying on money from parents and relatives has risen sharply as property prices soar.

A Government report published last month showed 27 per cent of those who bought their first home last year funded a deposit by relying on the ‘bank of Mum and Dad’, compared with 21 per cent 20 years ago.

Across the UK, the home ownership rate has fallen from 70.9 per cent in October 2004 to 64.1 per cent, according to the Resolution Foundation.

In the London suburbs, 57.8 per cent of people own their homes, down from a peak of 71.4 per cent in October 2000.