Home ownership at its lowest since 1986 as housing crisis spreads north

Home ownership in England is at its lowest in 30 years as soaring deposits and house prices have left many unable to get a foot on the property ladder.

New figures show that plummeting home ownership across Manchester and other major northern cities means the crisis is no longer confined to London.

According to think-tank The Resolution Foundation, Greater Manchester, South and West Yorkshire and the West Midlands Metropolitan area have all experienced double digit falls since the early 2000s.

Home ownership peaked at 71% in 2003 but the proportion of people owning their own property across England has fallen steadily over the last decade to 64%.

Greater Manchester has recorded the sharpest fall in home ownership of any major city area in the last decade, largely as a result of deposit affordability.

The figures show that in 2003, 72% of households living in Greater Manchester were owners – slightly above the average across England as a whole – compared to just 58% today.

In the West Midlands home ownership has fallen from a peak of 70.5% in 2005 to 59.3%.

The figures correspond with a near doubling in the proportion of private renters across England, up from 11% in 2003 to 19% in 2015.

The proportion of households renting privately in Greater Manchester has more than trebled over that period – from 6% to 20% – while Outer London and West Yorkshire have also reported double digit growth.

Stephen Clarke, policy analyst at the 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 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.”

Grahame Morris, Labour’s shadow secretary for communities and local government, said the government had failed to deliver key promises to build the homes needed to tackle the UK’s housing crisis.

He said: “Building more homes is part of the solution that involves increasing the housing mix we need to deal with the chronic housing crisis we face today. The report highlights that we have the lowest level of new builds for generations. At the same time more and more people are being forced into the private rented sector, paying higher rents with little protection from unscrupulous landlords.”

There are fears that first-time buyers are being squeezed out of the market due to the dwindling supply of suitable homes and ballooning property prices.

According to the latest Nationwide House Price Index, annual house prices in London rose 9.9% in June to £472,384.

Tougher affordability checks from lenders and rising house prices have also made it increasingly difficult for first-time buyers with smaller deposits to get on the property ladder.

Low interest rates combined with the economic recovery have done little to reduce the need for rented housing, while house price inflation ahead of wage growth has pushed property prices out of reach for many.