In May I noted that the English Housing Survey and the Dwelling Stock Estimate suggested that, after falling for over a decade, the home ownership rate had stabilised. The figure for 2014/15 was 63.6 per cent (up 0.3 per cent) if you believe the English Housing Survey. Or for the same year it was 62.5 per cent (down 0.3 per cent) if you believe the Dwelling Stock Estimate.
However, this morning there were some other figures which indicate home ownership may still be in decline. The Resolution Foundation has taken some numbers from the Labour Force Survey. Stephen Clarke, of the Resolution Foundation, says those figures are more current:
“While the fall from peak ownership in the early-2000s has been sharp, the last English Housing Survey offered some hope that overall home ownership rates may have started to level out. No such luck. As the chart shows, the modest apparent uptick in 2014 looks increasingly to be no more than a blip. More timely data from the Labour Force Survey suggests that the downward drift has continued into 2016. As a result, English home ownership now sits at just 63.8 per cent – taking us back to levels last seen in 1986.”
The quarterly data fluctuates a bit. But the number crunching effort by the Resolution Foundation covers 2015/16 – so a year more up to date than the previous figure we have seen. The tally of 63.8 per cent is a full percentage point below what the Labour Force Survey indicated for 2014/15.
This is not to suggest that the aspiration to own has diminished. Overwhelmingly that is what those renting would prefer. Clarke says:
“But for those who don’t yet own, the desire to buy remains as clear as it’s ever been. Data from the English Housing Survey’s First Time Buyers report shatters any notion that renting is a first choice destination. Fewer than one in ten private renters think they’ll never buy a home because they like it where they are and just 3 per cent actively prefer the flexibility of renting. Worryingly, of those that never expect to buy, two-thirds (65 per cent) say it is because they can’t see themselves ever being able to afford it.
“This matters not just because of the frustration it brings for those unable to buy, but because of its impact on living standard too. As we showed a month ago, housing costs have accounted for an increasing share of household income over recent decades. That’s driven by rising costs within tenures, but also by the shift towards private renting – which on average accounts for 30 per cent of income, compared with the 23 per cent figure associated with mortgages.”
It’s not just a London problem. The area with the sharpest drop in ownership over recent years is Greater Manchester.
A couple of caveats. The Labour Force Survey is just an estimate. In a few months we will see if the English Housing Survey and the Dwelling Stock Estimate show the same trend for 2015/16.
Also it does not mean that the Conservative housing reforms since 2010 should be discounted. The boost for Right to Buy, the New Homes Bonus, and liberalisation of the planning system have been useful reforms. Without them the rate of home ownership would have fallen even lower.
But far more needs to be done. A right to shared ownership for those in social housing would help. As would a more ambitious approach to reduce state land banking and thus increase supply. Most important of all would be embracing Bimbyism – Beauty in My Back Yard: much of the opposition to new housing development is due to the proposed building being ugly.
As well as a new Prime Minister we have a new Communities and Local Government Secretary – Sajid Javid – and a new Housing Minister – Gavin Barwell. I have no doubt that the thought that wider home ownership would be desireable had already occurred to them before today’s Resolution Foundation research. But if they needed a reminder they have been provided with one.