A report out today has shown that major English cities are now seeing a rapid decline in home ownership, with home ownership in Greater Manchester showing the fastest decline.
Written by Helen White
The Resolution Foundation said homes were becoming increasingly unaffordable for struggling potential buyers.
Towns and cities have seen the sharpest falls in home ownership since a peak in the early 2000s, analysis suggests.
Greater Manchester has seen the fastest drop and greatest decline where the proportion of home owners dropped by 14% – from 72% in April 2003 to 58% this year.
Home ownership in Greater Manchester and across the UK has fallen to its lowest level for 30 years.
Various factors have influenced the drop in home ownership figures:
- a lack of affordable housing has been blamed on the widening gap between income and property prices;
- in 2008 at the height of the recession banks and financial sector stopped offering 95% and even 100% mortgages;
- mortgage lending fell as home buyers needed to save more, on average 25% of sale price.
- instability in employment as short term contracts become commonplace
- high rents and high deposits make it virtually impossible to save for a deposit.
For first time buyers, it is increasingly common to call upon the ‘bank of mum and dad’ to get on the property ladder as further figures indicate that those who do opt to buy their own home are on average better off on a monthly basis than those who rent.
The average cost of a home in UK is £211,230 (May 2016). Homes in the south, including the south-west, south-east, London and East Anglia, costs £313,670. A typical home in the north, which the study includes as the Midlands, Yorkshire and Humberside, the north-west and the north-east, now costs £150,917.
The Resolution Foundation used data from the Office for National Statistics’ Labour Force Survey (LFS).
While the rental market is growing, a 3% stamp duty surcharge for buy-to-let investors will have pushed up prices, Nationwide said.