Homeownership falling in major cities, think tanks warns

The Resolution Foundation has outlined that major cities in England have seen a significant fall in home ownership since the early 2000s.

Analysis by the think tanks showed the the proportion of home owners dropped from 72 per cent in April 2003 to 58 per cent this year in Greater Manchester. It warned that one reason for the dip in numbers was because homes were becoming increasingly unaffordable for struggling potential buyers.

In an interview with the BBC, Matthew Whittaker, chief economist from the Resolution Foundation, explained: "What we particularly have seen since 2002-03 is that incomes simply haven't kept pace with house prices, so it's not just that house prices have gone up.

"We had access to lots of relatively easy credit and the position we're in now is that credit has been turned off. We have this sense now that house prices have become detached from people's earnings ... and we no longer have the route through 100 per cent mortgages and the like for getting on to the housing ladder."

The report comes after data from the government’s English Housing Survey showed the total number of buyers had fallen by a third in 10 years.

The data also found that home ownership had: fell from its 2006 peak in Northern Ireland of 73 per cent to 63 per cent now; dropped from 69 per cent in Scotland at its 2004 peak to 63 per cent now; and decreased from 75 per cent in Wales at its 2006 peak to 70 per cent now.

The think tank pointed out the data showed that homeownership was no longer a ‘London-centric issue’.

Stephen Clarke, the foundation's policy analyst, said: “London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the North of England. The chances of owning a home have fallen fastest in Greater Manchester over the last decade, though the Leeds and Sheffield city areas have also experienced sharp drops.

“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."

A spokesman for the Department for Communities and Local Government maintained that over 300,000 people had been helped into home ownership through government-backed schemes since 2010.

The spokesman added: “However, we know there is more to do, which is why we have set out the most ambitious vision for housing in a generation, including delivering hundreds of thousands of homes exclusively for first-time buyers.”