A generation of young families in rented properties could turn away from the Conservative Party, experts warned tonight, after new home ownership figures signalled the end of Margaret Thatcher’s housing legacy.
The number of 25 to 34-year-olds who own their home has fallen from two million to 1.3 million in a decade.
Photo: REX FEATURES
The Office for National Statistics said the number of 25 to 34-year-olds who
own their home has fallen from two million to 1.3 million in a decade.
Only 40 per cent of young adults own their own home compared with 58 per cent
in 2001.
The figures illustrate for the first time the sharp decline in home ownership
among young people since Mrs Thatcher’s home ownership drive of the
Seventies and Eighties.
The number of young people renting has risen sharply from 1.5 million to two
million over the same period as high property prices and low wages lock
young people out of the housing market.
The figures, based on England and Wales census data, also show that the number
of people renting homes in 2011 was more than 8.3 million — the highest
since 1961.
Experts said the data showed that Mrs Thatcher’s dream of a property-owning
democracy was now a “relic”, and that it could take years for young
professionals to be able to afford to leave the family home.
Nationwide, Britain’s biggest building society, said house prices were rising at the fastest pace for nearly three years, tightening the squeeze on would-be house buyers.
Nick Faith, of the think tank, Policy Exchange, said: “The stark drop in younger people owning a home presents a long-term challenge for all political parties but especially the Conservatives.
“Research shows that private renters and people living in social housing are less likely to vote Tory. That is why the Government needs to have an honest conversation about the need to build more quality housing, especially in urban and suburban areas. That’s where younger people tend to want to live.”
Emma Stone, of the Joseph Rowntree Foundation, warned a million people in “Generation Rent” could be locked out of home ownership until 2020.
She said: “Renting is likely to be the only game in town for young people trying to get a foothold in a fierce and competitive market.
“It means young people’s dreams of owning a home may never come true, while many more will have a much longer wait before they own their own properties. More people will be pushed into private renting or staying at home with mum and dad well into their thirties.”
She added: “Margaret Thatcher’s vision for a property-owning democracy increasingly looks like a relic from the 1980s — unless we address the chronic shortage of homes to improve affordability and supply.”
Despite the credit crisis, record low interest rates have helped underpin the housing market. Government schemes such as Help to Buy have begun to kick-start a recovery in price.
Capital Economics claims house values are on average six times higher than incomes, meaning property prices are “over-valued” by as much as 15 to 20 per cent.
A report this week revealed Virginia Water in Surrey is the first place outside of London where house prices average more than £1 million.
Matt Pointon, of Capital Economics said: “We’re not surprised to see the proportion of young home owners fall, and we believe it will continue to go down.” The ONS figures confirmed figures released in April which showed the proportion of owner occupiers in England and Wales has fallen for the first time in nearly 100 years, from 69 per cent in 2001 to 64 per cent.
Today’s data provided the first breakdown of home ownership by age. More than 75 per cent of 65 to 74-year-olds own their own homes, the highest across any age group. Some 87 per cent of 16 to 24-year-olds rent. The ONS data also showed that one in five families, or 1.2 million, are renting from a private landlord — double the level in 2001.
Shelter, the charity for the homeless, said couples who start a family in their twenties could face a 12-year wait to save enough money for a deposit, nearly double the time faced by a childless couple.
Campbell Robb, its chief executive, said: “For a generation, home ownership is drifting further and further away and we feel the Government missed an opportunity in the spending review to invest more in affordable housing.
“For successive governments, polticians have claimed that home ownership is a central theme, important for people and communities. The trouble is that the rhetoric and reality are further apart than they have ever been.”
Housing Minister Mark Prisk said: "These figures cover the end of the unsustainable housing boom which led to a near trebling of house prices in the decade from 1997 and a decline in the number of homeowners since 2003.
"In stark contrast, the number of first-time buyers is now at its highest level since 2007, housing is the most affordable its been for a decade for first-time buyers and home buying costs have fallen by a third in the last four years.
"But we're determined to help aspiring homeowners which is why our Help to Buy scheme is supporting people buy newly-built homes with a fraction of the deposit they would normally require."
Nationwide, Britain’s biggest building society, said house prices were rising at the fastest pace for nearly three years, tightening the squeeze on would-be house buyers.
Nick Faith, of the think tank, Policy Exchange, said: “The stark drop in younger people owning a home presents a long-term challenge for all political parties but especially the Conservatives.
“Research shows that private renters and people living in social housing are less likely to vote Tory. That is why the Government needs to have an honest conversation about the need to build more quality housing, especially in urban and suburban areas. That’s where younger people tend to want to live.”
Emma Stone, of the Joseph Rowntree Foundation, warned a million people in “Generation Rent” could be locked out of home ownership until 2020.
She said: “Renting is likely to be the only game in town for young people trying to get a foothold in a fierce and competitive market.
“It means young people’s dreams of owning a home may never come true, while many more will have a much longer wait before they own their own properties. More people will be pushed into private renting or staying at home with mum and dad well into their thirties.”
She added: “Margaret Thatcher’s vision for a property-owning democracy increasingly looks like a relic from the 1980s — unless we address the chronic shortage of homes to improve affordability and supply.”
Despite the credit crisis, record low interest rates have helped underpin the housing market. Government schemes such as Help to Buy have begun to kick-start a recovery in price.
Capital Economics claims house values are on average six times higher than incomes, meaning property prices are “over-valued” by as much as 15 to 20 per cent.
A report this week revealed Virginia Water in Surrey is the first place outside of London where house prices average more than £1 million.
Matt Pointon, of Capital Economics said: “We’re not surprised to see the proportion of young home owners fall, and we believe it will continue to go down.” The ONS figures confirmed figures released in April which showed the proportion of owner occupiers in England and Wales has fallen for the first time in nearly 100 years, from 69 per cent in 2001 to 64 per cent.
Today’s data provided the first breakdown of home ownership by age. More than 75 per cent of 65 to 74-year-olds own their own homes, the highest across any age group. Some 87 per cent of 16 to 24-year-olds rent. The ONS data also showed that one in five families, or 1.2 million, are renting from a private landlord — double the level in 2001.
Shelter, the charity for the homeless, said couples who start a family in their twenties could face a 12-year wait to save enough money for a deposit, nearly double the time faced by a childless couple.
Campbell Robb, its chief executive, said: “For a generation, home ownership is drifting further and further away and we feel the Government missed an opportunity in the spending review to invest more in affordable housing.
“For successive governments, polticians have claimed that home ownership is a central theme, important for people and communities. The trouble is that the rhetoric and reality are further apart than they have ever been.”
Housing Minister Mark Prisk said: "These figures cover the end of the unsustainable housing boom which led to a near trebling of house prices in the decade from 1997 and a decline in the number of homeowners since 2003.
"In stark contrast, the number of first-time buyers is now at its highest level since 2007, housing is the most affordable its been for a decade for first-time buyers and home buying costs have fallen by a third in the last four years.
"But we're determined to help aspiring homeowners which is why our Help to Buy scheme is supporting people buy newly-built homes with a fraction of the deposit they would normally require."
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