Double-digit drop in home ownership in West Midlands

LEVELS of home ownership have fallen sharply since the peak a decade ago.

The West Midlands county has seen home ownership fall by 11 percentage points since its peak in April 2005, and is now at 59.3%. The rest of the region has seen a similar fall, down 9.5 percentage points to 68.7%.

Analysis by the Resolution Foundation shows that having peaked at 71 per cent in 2003, the proportion of people owning their own home across England has fallen steadily over the last decade by eight percentage points. It suggests that the widely reported increase in home ownership in 2014 was likely a blip to correct a sharp fall the year before.

Stephen Clarke, policy analyst at the Resolution Foundation, said: “These drops are more than a simple source of frustration for the millions of people who aspire to own their home. The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.

“We cannot allow other cities to edge towards the kind of housing crisis that London has been saddled with. It’s encouraging that the new Prime Minister has talked about tackling the housing deficit.”

The fall in home ownership has corresponded with a near doubling in the proportion of private renters across England, up from 11% in 2003 to 19% in 2015. 

The Foundation says that the shift from home ownership to private renting – which is taking place throughout England, particularly among young people – is concerning for a number of reasons.

It notes that households in the private rented sector spend a far higher share of their income on housing than those who own with a mortgage – 30% compared to 23% – helping to explain the fact that the share of income that households spend on housing across the UK has increased by around a quarter since 2003.

Renters are also more likely to face the greater insecurity associated with short-term contracts, while the struggle to buy property makes it harder for people to accumulate wealth that they may rely on in later life.