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Ten years of trends in tenure

Posted on 17 July 2015 by Alun Humphrey, Group Head .
Tags: English Housing Survey, generation rent, housebuying, housing, mortgage, renting

Yesterday, DCLG published the latest report from the English Housing Survey, which reports data from the 2013-14 survey, carried out by NatCen. Government surveys such as the EHS are undertaken in a consistent manner over time, enabling us to see how society is changing over time. One feature of this report is that it focuses on changes that have occurred over the last ten years, since 2003-04, a period which obviously encompasses a very deep and prolonged recession.

So what are some of the key changes that have occurred? One important, and often overlooked, point is that the size of the household population has increased from 20.8m to around 22.6m, an increase of around 1.8m. Over the same period, approximately 1.4m dwellings have been completed[1], creating a shortfall in homes and inevitable pressure on the housing market.

To buy or not to buy?

From the EHS report, the first and most obvious change is in how we occupy our homes - our housing tenure. Back in 2003-04, 71% of households owned their home but by 2013-14, this had fallen to 63%. There has been a shift from owner occupation to private renting with the proportion of private renters increasing from 11% to 19% over the same period. This is despite successive governments making it a target to increase owner occupation.

EHS1

But this is not the only difference. Even among owner occupiers, there has been a change in how we buy our home. Back in 2003-04, when 71% of households were homeowners, 30% of households owned outright and 40% were buying with a mortgage. But in 2013-14, outright owners now outnumber those with a mortgage, accounting for 33% of households compared with 31% buying with a mortgage.

Generation rent

These are big changes at societal level but if you look deeper, there are even greater differences occurring. Among households aged between 25 and 34, the proportion owning has fallen from 59% to 36%. Correspondingly, the proportion of private renters in this age group has increased from just 21% in 2003-04 to 48% in 2013-14.

The report also compared first-time buyers who had bought within the previous five years. The proportion who financed the purchase of their home with help from a gift or loan from family or friends increased from 20% to 27% between 2003-04 and 2013-14 and the proportion who bought with inheritance more than doubled over this 10 year period from 3% to 8%.

Given that private renting has become more common, it is interesting to see that the profile of private renters has changed. In 2013-14, 35% of private renting households contained dependent children, up from 23% in 2003-04. Average rents have increased from £115 per week in 2003-04 to £176 in 2013-14.



[1] https://www.gov.uk/government/statistical-data-sets/live-tables-on-house-building Live table 209 - figures completed in the ten years 2003-4 to 2012-13.

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