Home ownership in UK falls to lowest level since 1986: Study
The United Kingdom is facing a nationwide housing crisis as rising property prices have cut ownership rate to its lowest level in 30 years, according to a new study.
The research released by the Resolution Foundation on Tuesday found that affordability is the biggest barrier to home ownership in the UK, which is now lower than any country in Western Europe except for Germany.
Construction has also failed to keep pace with demand, keeping new buyers out of the market, it showed.
Home ownership fell to 63.8 percent in February this year, which is similar to the level seen in 1986.
Back then, the average first-time buyer would purchase a home for £30,000 ($39,800), a sum that would hardly cover a deposit for rent these days.
The average cost of a home for first buyers now tops £150,000 ($198,500), while incomes have failed to keep pace.
The home ownership figure is down from a peak of 70.8 percent in 2003.
As a result, more people are now forced to rent in the private sector, which is more expensive than a mortgage and risky for the customers, the study found.
“This matters not just because of the frustration it brings for those unable to buy, but because of its impact on living standards too,” said Stephen Clarke, a policy analyst at the foundation.
“Housing costs have accounted for an increasing share of household income over recent decades,” he explained.
The fall in home ownership has come amid a near doubling in the number of private renters across England since 2003.
Clarke warned that the shift “can reduce current living standards and future wealth, with implications for individuals and the state.”
The study also found that the uncertainty following the June 23 referendum to leave the EU has further dampened client confidence in the housing market.