Record fall in number of homeowners in 2007
Thursday 14 February 2008
The number of people who own their home fell by a record 83,000 in 2007, according to figures published by Halifax Bank yesterday. There are now only 85,000 more households in England occupied by their owners than there were five years ago. The preceding five-year period, meanwhile, saw an increase of 697,000.
The decline in home-ownership was particularly notable in the 16 to 44 age group, with 235,000 fewer owners occupying their properties in 2007 compared with the previous year. The figures, based on research from the Department for Communities and Local Government, also reveal a regional divide in owner-occupation: while numbers in the north rose by 345,000 (5.1 per cent) between 2001 and 2006, in the south they dropped by 92,000 (-1.2 per cent) during the same period, with London bringing up the rear at 111,000 (-6.3 per cent).
Martin Ellis, chief economist at Halifax, said the dwindling figures largely reflected "the increasing affordability difficulties faced by many potential purchasers as a result of the rapid rise in house prices in recent years". He drew particular attention to those in the 25 to 34 age band, who own and occupy 322,000 fewer households than in 2001.
The obstacles to property ownership faced by the young drove down the number of houses bought with a mortgage last year by 2 per cent, Halifax said. This drop outweighed the 1.3 per cent increase in the number of houses that were bought outright in 2007.
However, Halifax pointed out that the decline in home ownership had fuelled the continued growth of the private rental sector. The number of homes owned by buy-to-let landlords rose by 4.3 per cent in 2007 to just under 2.6 million, with an overall increase of 22.9 per cent (483,000) over the past five years.
Some housing analysts have warned that buy-to-let landlords have priced many would-be home owners out of the market. However, Mr Ellis said the rising number of privately rented houses was good news.
"The buy-to-let sector has met a demand that has existed for some time – young people have long wanted more choice or been unable to buy – and it is now meeting the high demands of growing immigrant and student populations in England," he said.
The owner-occupation rate in the UK is on a par with the US and Australia at around 70 per cent. Spain has the highest rate among advanced industrial nations at 82 per cent. In large Euro-zone nations like France (56 per cent) and Germany (45 per cent), however, it is much lower.
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