Number of homeowners could plummet by two million
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The number of homeowners is set to plummet by almost two million people by 2025, says a report by the Smith Institute.
The think-tank says if the current state of decline continues, only 15.5 million households will be in owner occupation. It warns that allowing house prices to fall to combat the downward trend would lead to a dramatic increase in negative equity.
The study finds that a range of factors are eroding potential homebuyers’ ability to own a home. As a result of the banking crisis borrowers face much tougher requirements, further moving mortgage finance out of reach.
The move towards greater job flexibility and the lack of “jobs for life” means that a declining number are able to put down roots as they have to increasingly move due to the availability of work. Future first time buyers are also facing obstacles such as increased debt caused by rising student fees, dissuading them from aiming for homeownership.
As a result of the findings, social landlord Genesis Housing Association, is of the view that housing associations should look outside of their core customer base to help the growing numbers that are being pushed into the private rental sector.
It says housing associations should open up the types of tenure they offer to help find the right solution for the new wave of private renters.
Neil Hadden, chief executive of Genesis, says: “The Thatcherite vision of everyone owning a home is no longer relevant today. This report has found that a significant number of people face the prospect of no longer being able to buy a home; the government and all political parties need to change their language and stop promoting home ownership.
“Housing providers like Genesis need to step in to help find solutions that are right for these market renters. We no longer live in a world where one size fits all and we need to look towards a mixture of solutions depending on individual household circumstances.”
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Readers' comments (4)
Paul James | 15 Jun 2011 1:44 pm
It is our belief that the drop in house pprices will lead to further uptake by wealthy investor individuals and corporations to mop up the surplus property bank. All we can do is try to get the best for our clients whoever they are!
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All is Chosen | 17 Jun 2011 8:29 pm
Anyone else smell nothing but greed at its worst in the above?
As for giving your outfit a biblical name, no printable comment
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Gavin, London | 17 Jun 2011 9:00 pm
RE ". It warns that allowing house prices to fall to combat the downward trend would lead to a dramatic increase in negative equity."
So be it. Why should future generations be priced out or take on huge debts to bail out this reckless greedy one.
The solution to the property crisis is to allow prices to fall back to normal levels. We don't need interventions from housing associations especially as they have helped inflate the housing bubble.
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Rob Moore | 18 Jun 2011 11:13 am
This is the inevitable consequence of society failing to build enough homes for the rising population. I have realised this and I am now planning to buy my second buy-to-let property because it looks like the government is resolutely decided not to build new homes (they would sooner spend £37billion on a high speed rail link instead of homes for the population). So, rents will go up, the propertied classes will get richer and everyone else will get poorer. I have tried and campaigned for five years for more housing to prevent this but to no avail. Now I know which side of the fence I have to be on so I'm going to play the game I am forced to play.
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