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03/08/2016

Home ownership falls across English cities

Words: Laura Edgar
Mayoral elections in England / Shutterstock_225476584

Cities in the north of England have seen the largest fall in home ownership, according to new research.

Think tank Resolution Foundation said plummeting home ownership is no longer a “London problem” and current levels of home ownership were last seen in 1986.

Greater Manchester, south and west Yorkshire and the West Midlands Metropolitan area are experience double digit falls since the early 2000s peak, the research suggests.

In 2003, 72 per cent of households living in Greater Manchester owned their homes, which was slightly above the average for England.

According to the research, the number of home owners in Greater Manchester has dropped by 14 per cent, meaning that by last year, 58 per cent of households owned their home.

Resolution Foundation said that people living in Greater Manchester are “no more likely” to own a home than people living in outer London. Home ownership levels in the area have fallen below all northern cities except from Tyne and Wear.

The foundation attributed falling deposit affordability as playing a “major” role in this trend.

Outer London, south and west Yorkshire and the West Midlands Metropolitan Area have also experience double digit falls since the early 2000s. At the same time, the number of private renters is up from 11 per cent in 2003 to 19 per cent in 2015.

In Greater Manchester, the renting figure has increased from 6 per cent to 20 per cent over the same period.

The reduction in home ownership and increase in private renting, particularly among young people is, the foundation said, a concern for a number of reasons.

Households in the private rented sector spend more of their income on housing than home owners with a mortgage, 30 per cent compared to 23 per cent.

Stephen Clarke, policy analyst, 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 cities across the north of England.

“The chances of owning a home have fallen fastest in Greater Manchester over the last decade, though the Leeds and Sheffield city areas have also experienced sharp drops.”

These drops, Clarke said, are more than a “simple source of frustration” for the millions of people who aspire to own their home.

“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. It’s encouraging that the new Prime Minister has talked about tackling the housing deficit. She may find that making good on this promise could secure as important a legacy as negotiating a successful exit from the European Union,” Clarke said.

Tony Brooks, joint managing director, Moda Living, said that one of the key things missing from the debate is “even the tiniest acceptance that saddling young people with debt and pushing people into ownership at all costs may not be the most appropriate thing to do”.

While it is “fantastic” that the government’s various schemes have helped around 300,000 people get on the housing ladder, “what we fundamentally lack is a supply of quality rented accommodation suitable for people who can afford to pay market rents”.

“Everyone accepts the need for more affordable housing – and policies like the extension of right to buy do nothing to help this. But in a society where Netflix, Spotify, Zip Car and Uber have created an “asset-light” economy, we shouldn’t disparage people simply because they do not own a house.”

The research, Brooks said, highlights an “important issue” but to ensure city centre economies can thrive, “we have to have a functioning rental market offering flexibility and a level of convenience that fits with the way people now live.”

Image credit | Shuttershock

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