There's been a drastic drop in the number of young people living in a property they own. The latest English Housing Survey shows that budding first-time buyers are stuck in a rut.
What’s the latest?
Young people are more likely to rent a home than own one following a sharp drop in those getting on to the property ladder during the past decade.
Only 37% of people aged between 25 and 34 now live in a property they own, down from 57% in 2006/07.
At the same time, the proportion of this age group who are renting a home in the private sector has soared from 27% to 46%, according to the English Housing Survey, which investigates people’s housing circumstances and the condition of properties in England.
Those in the 35 to 44 age group fared little better, with the proportion of owner-occupiers dropping from three-quarters to just a half in the past 10 years, while people in private rental accommodation nearly tripled to 29%.
But other generations have done better, with the level of households who own their home outright increasing to 34%, which was attributed to a large number of baby boomers reaching retirement and paying off their mortgage.
Russell Quirk, founder of online estate agent Emoov, said aspirational homebuyers face a 'tough task' getting on to the property ladder and, "they will no doubt be stuck renting for quite some time to come".
How have ownership rates changed?
Around 63% or 14.4m households live in a property they own, either outright or with a mortgage.
The number of owner-occupiers increased steadily from the 1980s until 2003, when it reached a peak of 71%, but it has been on a downward trend since then, although rates have not changed since 2013/14.
Despite this, owning a property outright is the most common type of tenure at 34%, followed by owning a property but having a mortgage at 28%.
One in five households is renting a home in the private sector, while 17% are in the social rented sector.
In London, people are most likely to be renting a home in the private sector at 30%, followed by owning a property outright at 25% and buying a home with a mortgage at 22%.
Do renters want to buy a home?
The majority of people renting in the private sector hope to become owner-occupiers one day, with 60% saying they expect to buy a property, although 41% of these think it will be at least five years before they are able to do so.
Those in social housing are less likely to aspire to being homeowners with just 30% planning to buy a property, although the figure is up from 27% in 2015/16.
But the age at which people get on to the property ladder is increasing, with the typical first-time buyer aged 33 in 2016/17, up from 30 a decade ago.
First-time buyers put down an average deposit of £48,591 in 2016/17, but for two-thirds of them this represented less than 20% of their home’s purchase price.
While the majority of people used savings for their deposit, 35% had help from family and friends and 10% received an inheritance.
But once they get on to the property ladder, people are considerably better off owning a home than renting one, with owner-occupiers spending an average of just 18% of their household income on mortgage repayments.
By contrast tenants in the private sector typically spent 39% of their income on rent.
Any other interesting findings?
More than half of owner-occupied homes in the UK are now classed as being under-occupied, with the proportion jumping from 39% a decade ago to 51% now.
During the same period there has been a fall in the number of rental homes that are under-occupied, with just 15% of private rental properties classed this way.
Top 3 takeaways
- Young people are more likely to rent a home than own one following a sharp drop in those getting on to the property ladder during the past decade
- Only 37% of people aged between 25 and 34 now live in a property they own, down from 57% in 2006/07
- The proportion of this age group who are renting a home in the private sector has soared from 27% to 46%
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