long term trends in home ownership
In 1980, 56% of the housing stock was owner-occupied. By 1985 this had grown to 62% (a rise of and by the end of the 1980s housing boom the ratio was 66% (15.4 million households). New figures from the Council of Mortgage Lenders show that in 1999, 71% of households either owned their property outright or owned with a mortgage.
By contrast the share of the housing stock taken up by the rented sector is in long run decline. This is particularly true for social rented housing. In 1980, one third of housing was in the social rented sector. The figure is now below 17%. The private rented sector has stabilised in recent years and the share taken up by Housing Associations has grown. But the structural change towards privately owned and financed housing is clear to see
Explaining the shift towards home ownership
Many factors account for the rise in home ownership.
Government policies have created incentives to buy property rather than rent. In 1980 the Housing Act gave local authority tenants the “right to buy” council houses as heavily discounted prices. Over a 1.5 million tenants have taken advantage of this in the last twenty years.
Deregulation of mortgage finance has opened up the market to millions more potential home buyers. Mortgages are now longer rationed as they were in the 1960s and 1970s. There is great competition between mortgage lenders with a bewildering amount of choice for people seeking a housing loan. Another factor has been the relative decline of the rented sector. Good quality and affordable rented housing can be extremely hard to find and this often makes renting a poor substitute for buying
Rising Living Standards as real incomes have grown over the years more people have opted to buy their own properties rather than rent. Owner-occupied housing can be seen as a normal good with a positive income elasticity of demand
Shortage of affordable and good quality rented accommodation - the private and public rented sector of the housing market has diminished over the last twenty years. In many areas there is a distinct shortage of reasonably priced rented accommodation and often people looking to rent have to commit themselves to a minimum of 6 or 12 months lease arrangements.
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