Home ownership in latest fall as renting rises

The number of owner-occupied households has continued to fall, says the latest English Housing Survey.

Covering 2010-11, the survey published this week says there were 14.45m owner-occupied households, compared with a peak of 14.79m in 2005.

By contrast, the number of private rental households has rocketed and stands at 3.62m, compared with 2.45m in 2005.

Overall, in 2010-11, 66% of households were owner occupiers, 17% were private renters and 17% were social tenants.

London had the highest proportion of private tenants at 25% and the lowest proportion of owner-occupiers at 51%. The percentage of social tenants was highest in London and the North-East, both 24%.

The biggest shift towards renting is in the 16 to 34-year-old age group. In 2010-11, 36% of this age group were in owner occupation, 18% were social renters and 46% were renting privately. This compares with 1991, when 60% of this age group were owner occupiers and 18% were renting privately.

The average household size for all households was 2.3 people, with 29% of all households containing just one person.

Owner occupiers were richer than private tenants, but paid less on a mortgage than tenants did on rent. An owner-occupier household had an annual income of £40,900 compared with £29,000 for private tenants. Owner occupiers made average weekly mortgage payments of £143, compared with average weekly rent of £160.

On average, weekly mortgage payments were 19% of home owners’ income, while weekly rent payments were 43% of tenants’ income.

Private renters had the highest housing costs of all three groups – owner occupiers, private tenants and social tenants.

The English Housing Survey also notes a significant fall in the number of households with a mortgage – from 8.3m in 1996-97 to 7.1m in 2010-11. There has also been a major change in the type of mortgage: in 1996-97, 33% of mortgages were repayment loans, while in 2010-11 this had increased to 73%. Only 3% of mortgages were interest-only in 1996-97, but the proportion had increased to 13% in 2010-11.

The survey also questioned private tenants about deposit protection. Despite it being a legal requirement for the last five years, only 47% of private tenants said their deposit had been protected, while 24% said their deposit had not been protected and 28% did not know.

The majority whose deposits were protected had the money returned in full (70%), but 17% received only part of their deposit back and a further 12% received none of their money back. While more than half of these were given reasons, 40% were not told why their deposits were withheld.

The survey found that 59% of private tenants and 23% of social tenants expect to buy a home at some point, and 16% had considered buying a home in the previous 12 months. However, there was not much confidence about property prices: in nearly every region other than London, a larger proportion of households thought their property value had decreased rather than increased in value over the previous year. Around 1% believed they were in negative equity.

The survey also looked at housing stock in England, consisting of a total 22.4m dwellings, with private rented houses tending to be older. It found that 52% of private rented stock was built before 1945, including 40% before 1919. In comparison, 21% of owner-occupied stock was built before 1919.

Disrepair levels were highest in the private rented sector, and across all types of housing, dampness was a problem in 7% of dwellings. However, in the private rented sector, dampness problems affected 13% of homes: while higher than average, this was noticeably down on the 21% recorded in 2001.

In terms of energy performance, social housing did better than either owner-occupied or private rented homes. Homes in the private rented sector increased their energy performance to the point that they are almost identical with owner-occupier homes. All told, the survey estimates that 17.8m dwellings could be upgraded, at an average cost of £1,100.