A report indicating that home ownership has plummeted in England shows the growing importance of the rental sector and need for more homes, says a lender.
English home ownership levels have fallen to the lowest levels since 1986, according to a report released by the think tank Resolution Foundation yesterday. It said that home ownership levels are now 64%, compared with the peak of 71% in 2003.
Charles Haresnape, of challenger bank Aldermore, reacted saying it showed “the important role that private landlords play in meeting the needs of tenants”.
But he added that the Government must “meet and exceed” house-building targets if it really wants to improve home-ownership levels.
“Progress has been made in recent years around updating the planning laws and regeneration of brownfield sites, but we need to also look at issues such as access to finance for small developers and building on areas of the Green Belt,” he said.
The Resolution Foundation report stated that home ownership in England had gone down 8% in the past decade after a peak of 71% in 2003.
Greater Manchester recorded the sharpest fall in home ownership of any major city area in the last decade, the think tank concluded, with the number of people owing their own homes in that metropolitan county slipping from 72% in 2003 to 58% last year.
The report also said this fall in home ownership corresponded to a near doubling in the proportion of private renters across England, up from 11% in 2003 to 19% in 2015.
But the Residential Landlords Association hit back at the claim in the research that renters are also more likely to face the greater insecurity associated with short-term contracts.
The RLA said a recent English Housing Survey showed that private sector tenants are spending an average of four years in a current property.
Alan Ward, chairman of the RLA, said: “The evidence shows that tenants in the private rented sector are staying in their homes for longer.
“No landlord ever wants to lose a well-behaved tenant who pays their rent on time.”
Developers suggested the report placed too much emphasis on ownership and suggested the Government should focus on attracting institutional investment into the private rented sector.
Dominic Martin, operations and strategy director at developer Westrock, said: “It makes far more sense to offer a range of tenures, and attracting private investment will depend on a mix of policies capturing the wealth of institutional investment currently seeking income returns.”
Tony Brooks, joint managing director at Moda Living, a developer specialising in private rented sector communities, said: “Resolution Foundation’s research highlights an important issue, but to ensure city centre economies can thrive, we have to have a functioning rental market offering flexibility and a level of convenience that fits with the way people now live.”