Home Ownership Rates UK
Home Ownership has been an emotive and important political issue in the UK. Not for nothing do we have the phrase ‘ An Englishman’s home is his castle’.
In the post war period, rising affluence, enabled a marked rise in homeownership as more families could now afford to buy outright rather than rent.
In the 1980s, the Conservative government aggressively promoted the idea of a ‘home owning democracy’ – leading to a further growth in home ownership, helped in particular, by the policy of selling council houses cheaply to tenants.
source: CML – pdf
Home Ownership rates in UK
In 1953, the proportion of owner-occupiers in England was 32 per cent. In 1961 this was 43%
Homeownership rates peaked at just over 70% in 2000. As mentioned in post – ‘first time deposits’, they have now fallen to 68%.
Reasons for Home Ownership
Homeownership is the most popular form of living. The majority of people aspire to be a homeowner, even if they may not be able to afford one. The traditional benefits of homeownership include:
- Benefit from rising Prices and hence rising wealth – historically, house prices have exceeded inflation in UK.
- Potential of Living rent free during retirement years.
- Provides Greater Security, can’t be asked to move.
More: Benefits of buying own house.
However, there are also potential problems of this desire for home ownership.
- The 1980s, which saw a rapid rise in home ownership, also saw a boom and bust in house prices.
- In a bid to get ‘on the property ladder’ many people overstretched themselves getting mortgages several times income.
- Homes can be difficult to sell reducing labour market flexibility.
- Volatility in house prices can leave new buyers with negative equity
- Volatility in interest rates can make mortgage payments unaffordable – e.g. 1991, 1992 period.
- Increased wealth inequality between those who own property and those who don’t
More: Disadvantages of buying house
Homeownership per se is not a bad thing. But, the pursuit of ever increasing homeownership can be a problem when there is a shortage of housing and a volatile housing market. The UK, may well need to learn to lessen its obsession with home ownership.
