Homeownership has fallen faster in Greater Manchester than any other area of the UK, says an analysis by the Resolution Foundation think-tank. At its peak, the homeownership rate in Greater Manchester was 72.4% in April 2003. But by February 2016, this had slumped 14.5% to 57.9%.
Outer London had the second largest fall in homeownership. At its peak in October 2000, the rate was 71.4%. By February 2016 it had fallen by 13.5% to 57.8%. The rapid growth in house prices, fuelled by a protracted supply shortage, has trapped more people in the private rented sector because they cannot afford to buy their own home.
The area with the smallest fall in homeownership was Strathclyde at a 3.4% drop to 63.3% from its peak of 66.7% in November 2007, though this was one of the lowest peaks of all the areas. The Resolution Foundation used the most recent data from the Labour Force Survey published by the Office for National Statistics (ONS) because figures from the English Housing Survey only go up to 2014.
"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," said Stephen Clarke, policy analyst at the Resolution Foundation. "These drops are more than a simple source of frustration for the millions of people who aspire to own their home. 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."
The overall peak of homeownership fell 6.5% from its peak of 73.4% in October 2003 to 66.9% in February 2016. The government has since 2010 made increasing the rate of homeownership a priority. It has introduced a number of schemes to support first-time buyers, such as Help to Buy and starter homes, as well as extended existing schemes, such as shared ownership and Right to Buy.
But the volume of new supply continues to fall well below what is needed to meet demand, estimated to be as much as 300,000 new units a year. There were 142,890 housing completions in the 12 months to December 2015, a 21% annual increase. New housing starts also rose, though more slowly. There were 143,560 starts, a 6% rise year-on-year.
Changes in the homeownership rate by area (rounded figures)
|Area||Peak of home ownership||Home ownership in Feb-16||Change||Date of peak home ownership|
|Rest of North West||78.7%||71.4%||-7.3%||Oct-99|
|Rest of Northern region||72.4%||63.3%||-9.1%||Oct-05|
|Rest of Scotland||71.5%||63.7%||-7.7%||Oct-04|
|Rest of South East||75.7%||70.5%||-5.3%||Apr-00|
|Rest of West Midlands||78.1%||68.7%||-9.5%||Oct-05|
|Rest of Yorks & Humberside||74.6%||65%||-9.5%||Apr-04|
|Tyne & Wear||64%||56.5%||-7.5%||Apr-03|
|West Midlands (met county)||70.5%||59.3%||-11.2%||Apr-05|