BASTION ESTATES COMMENT: The BBC reported today that home ownership is falling particularly in major English cites according to a think tank group. I’m not sure we need a think tank or a rocket scientist to tell us this in a dramatic headline when it is a logical conclusion and something the property industry is more than aware of and it is something we at Bastion Estate have commented on in this blog many times over a long period.
We are merely coming into line with out European neighbours and long term or even a lifetime of renting is becoming more common. It would be a little tedious to repeat what we have already said but the rental market is a strong market and the investment choice for the smarter savvy investor. With articles like this and the changing trends and financial implications long term renting is here to stay and the demand for quality housing will continue. Good solid news for the buy to let property investor.
The BBC said:
Major English cities – particularly Manchester – have seen the sharpest falls in home ownership since a peak in the early 2000s, analysis suggests.
The Resolution Foundation said homes were becoming increasingly unaffordable for struggling potential buyers.
The proportion of home owners dropped from 72% in April 2003 to 58% this year in Greater Manchester, it said.
West Yorkshire, the metropolitan area of the West Midlands and outer London have also recorded double-digit falls.
Explaining the falling rates of home ownership, Matthew Whittaker, chief economist from the Resolution Foundation, told the BBC’s Today programme: “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% mortgages and the like for getting on to the housing ladder.”
The average first time buyer paid just under £30,000 for their new home in the 1980s compared with more than £150,000 now, the think tank said.