Number of private tenants also overtook those in social housing for first time in 2012/13, according to English housing survey
Home ownership fell to its lowest level in 25 years in 2012/13, while the number of private tenants overtook the number in social housing for the first time, according to official figures that show how tenure has shifted over three decades.
The latest English housing survey showed that the proportion of homes lived in by owner-ocupiers had dropped to 65.2%, down from 71% in 2003 and its lowest level since 1987.
Ownership levels have been driven down by rising prices and tougher mortgage criteria, and charities have called on the government to increase the number of affordable homes being built.
Campbell Robb, Shelter’s chief executive, said: “These figures confirm the historic shift that people across the country are already feeling. As house prices rise, the dream of a stable home is drifting further out of reach.
“That leaves families faced with the unsettling reality of bringing up children in a cycle of short-term private lets, without the stability they need to put down roots and get on in life.”
The survey showed that 3.9m of the country’s 22m households were living in private rented homes in 2012/13, compared with 3.7m social renters.
In 1980, when the records began, there were 2m private and 5.3m council tenants, but the sell-off of council properties through right-to-buy, a number of changes in the private sector and, in recent years, falling home ownership, have caused the turnaround.
“Throughout the 1980s and 1990s, the proportion of private sector households stayed steady at around 10%. However, the sector has undergone sharp growth since then and has nearly doubled in size,” the survey found.
“This was driven by a number of factors; in the late 1990s rent controls were removed, and assured shorthold tenancies became the standard, giving greater flexibility in the length of tenancies. Lenders also introduced the buy-to-let mortgage at around the same time.”
Average weekly rents in the private rented sector continued to be well above those in the social sector, the survey showed, at £164 a week compared with £83. A third of working households in social accommodation received housing benefits to help them meet the cost of their rent, up from 24% in 2010/11. That compares with 12% of households in private rented property.
Reduced mortgage availability since the credit crunch has forced some would-be buyers into the rental sector. The survey showed the number of owner-occupiers has been falling since 2006, when it reached a peak of just under 14.8m. Since then it has dropped by almost 500,000, falling by 51,000 in 2012/13 alone.
The research also looked at occupation levels of both rented and owner-occupied properties, and found that under-occupation levels were significantly higher amongst those who owned their own home.
Half of owner-occupiers were under-occupying, defined as having at least two bedrooms more than they needed, compared with 16% of private renters and 10% of social renters.
The survey was carried out before the launch of Help to Buy, and growing confidence amongst lenders and homebuyers which saw purchases increase steadily throughout 2013.
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