Much publicity has been given to the Resolution Foundation’s report into falling home ownership – but the flip side is that there has been a dramatic rise in renting.
The foundation’s claim that home ownership has fallen from 71 per cent of English households to 63 per cent has corresponded with a near doubling in the proportion of private renters, up from 11 per cent in 2003 to 19 per cent in 2015.
The proportion of households renting privately in Greater Manchester in particular has more than trebled over that period – from six per cent to 20 per cent – while Outer London and West Yorkshire have also reported double digit growth.
The foundation claims that the shift from home ownership to private renting, which is taking place throughout England and particularly among young people, is concerning for a number of reasons.
It notes that households in the private rented sector spend a far higher share of their income on housing than those who own with a mortgage (30 per cent compared to 23 per cent), helping to explain the fact that the share of income that households spend on housing across the UK has increased by around a quarter since 2003 (and by around a third in the north west of England in particular).
The foundation also says renters are also more likely to face the greater insecurity associated with short-term contracts, while the struggle to buy property makes it harder for people to accumulate wealth that they may rely on in later life.
The rental market analysis follows from the organisation’s claim that English home ownership has fallen to levels last seen in 1986, with Greater Manchester, South and West Yorkshire and the West Midlands Metropolitan area experiencing double digit falls since their early 2000s peak.
The analysis shows that having hit a high of 71 per cent in 2003, the proportion of people owning their own home across England has fallen steadily over the last decade by eight percentage points. It suggests that the widely reported increase in home ownership in 2014 was likely a blip to correct a sharp fall the year before, rather than a reversal of a long standing trend.
The foundation says that while much of the discussion around the struggle to buy a home has centred on London, Greater Manchester has actually recorded the sharpest fall in home ownership of any major city area in the last decade or so.
Back in 2003, 72 per cent households living in Greater Manchester were owners – slightly above the average across England as a whole. However, home ownership has since plummeted by 14 percentage points – almost twice as fast as it has in England – so that by last year just 58 per cent of households living in Manchester owned their own home.