Is Britain’s “golden age of home ownership” Finally Over?

by Mark Johnston

A major housing organisation announced that the UK’s “golden age of home ownership” is coming to an end, leaving millions of people facing a lifetime of renting as they will never be able to afford to get onto the housing market.

The organisation, the Chartered Institute of Housing made the announcement to bring attention to the issues and to ask the government to step in and help the estimated three million households in the private sector that have no means of getting out and onto the property market.

Recent house price and mortgage reports have shown that in some parts of the United Kingdom first time buyers need to find such large deposits that many will never be able to afford. The average income is around £22,000 per year whilst the required deposits can be around £40,000.

Research by Hometrack, the UK’s leading housing intelligence firm, showed that a single person working and living in London would need to earn more than £50,000 a year to be able to get a mortgage for a two bedroom flat in the bottom end of the market in terms of location and property.

The Chartered Institute of Housing said that home ownership is becoming increasingly impossible for millions of people as property prices remain some of the highest in Europe, whilst relative incomes are still low in comparison. This together with the new lending rules being imposed by banks to be more responsible is meaning that for many homing their home will remain just a dream.

This may well be the start of a cultural shift but the worrying thing for millions is that cannot afford to save such large deposits is taht they will fall into a black hole that the market has created. The study released by the Chartered Institute of Housing is calling for help for the millions who earn too much to qualify for social housing but don’t earn enough to stand any sort of chance of getting onto the UK property market. Even share ownership schemes where only 50-75% of a property is purchased are still out of reach as rent is still payable for the other proportion.

Sarah Webb, CIH chief executive, says the “in-betweens” do everything the government asks – working and generally not claiming benefits – but not getting anything in return. “This idea that an Englishman’s home is his castle gained momentum in the 1980s with right-to-buy, and then post the 1990s downturn when people saw owning a home as not just accumulating somewhere to live but also an investment,” she said. “That home ownership is out of reach for a lot of people and we need to move to a situation where renting is a positive choice. A golden age of home ownership is coming to an end. The time has come to move away from the notion of ‘right-to-buy’ and ‘wrong-to-rent’.”

A spokesperson said that as a nation we needed to face up to the fact that people will need to rent as a viable long term solution but out private rental market was not fit for purpose. Four out of ten properties on the rental market are classed as “non-decent” which usually means they suffer with damp, broken windows and inadequate kitchens and bathrooms. The CIH is calling on the government and local authorities to provide housing for this sector of society to enable “intermediate renting” schemes for the medium and longer term.

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