Pre Thatcher Home Ownership Levels 'To Return'

Home ownership levels are to fall to their lowest level since the 1980s, according to a study published on Tuesday.

In its report, the National Housing Federation (NHF) said the housing market was "in crisis" as owner occupation rates tumbled and house prices and private rents soared.

"Home ownership in England will slump to just 63.8% over the next decade - the lowest level since the mid 1980s - as an entire generation are effectively locked out of the housing market," the report said.

The federation said its independently commissioned forecasts predicted that huge deposits, combined with high house prices and strict lending criteria, had sent home-ownership into decline in recent years and that the downward trend would continue for the foreseeable future.

The report comes less than a week after Housing Minister Grant Shapps announced Government plans to "give councils more financial freedoms to improve, buy and build new housing".

Mr Shapps said the new proposals, which have been published for consultation, would allow councils more flexibility to trade their assets, and use the receipts to enable further investment in new homes and regenerating the local area.

The plans did not include plans for Government investment of assistance for first time buyers.

However, responding to the NHF report on Tuesday, Minister Shapps said his plans would "get Britain building again".

"That's why I've announced plans to release thousands of acres of public land for housebuilding. And despite the need to tackle the deficit we inherited, this government is putting £4.5bn towards an affordable homes programme which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years."

Meanwhile, the Federation warned the housing market will be plunged into an "unprecedented crisis" as it forecast steep rises in the private rental sector, huge social housing waiting lists, and a house price boom – all fuelled by a chronic under-supply of homes.

Among other predictions, the report said that in England, the proportion of people living in owner occupied homes would fall from a peak of 72.5% in 2001 to 63.8% in 2021;

in London, the majority of people living in the capital will rent by 2021 with the number of owner occupiers falling from 51.6% in 2010 to 44% by 2021; and the North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2% to 67.4%.

The NHF said the heart of the problem was a chronic under-supply of new homes.

"In 2010/11 just 105,000 homes were built in England – the lowest level since the 1920s," the report said.

(DW/BMcC)