Think tank, The Resolution Foundation, has published some gloomy analysis about the UK’s property market.
The nation has seen its sharpest fall in home ownership since the early 2000s. And it’s not just London that is suffering. This latest report shows plummeting numbers in northern cities – with Greater Manchester, South and West Yorkshire and the West Midlands Metropolitan area experiencing double digit falls.
Having peaked at 71 percent in 2003, the proportion of people owning their own home across England has fallen steadily over the last decade – by eight percentage points. The Resolution Foundation says that, while much of the discussion around the struggle to buy a home has centred on London, Greater Manchester has actually recorded the sharpest fall in home ownership of any major city area in the last decade or so.
It says falling deposit affordability has played a major role in this trend – and that the decline in home ownership has corresponded with a near doubling in the proportion of private renters across England – up from 11 percent in 2003 to 19 percent in 2015.
Households in the private-rented sector spend a far higher share of their income on housing than those who own with a mortgage – 20 percent compared to 23 percent.
The problem stems from many younger people having to pay rapidly rising rental costs. When you’re spending much of your income in order to live in a home you don’t own, you’re unable to enter the property market because you have no money left over to save for a deposit.
It’s a tricky situation – and the Government had tried to intervene by introducing schemes like Help to Buy, which side step the need for large deposits. Overseas investors too are buying up homes, particularly in London and Northern Powerhouse cities, and then leaving them empty – which is driving up house prices.
Stephen Clarke, policy analyst at the Resolution Foundation adds: “London has a well-known 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 faster in Greater Manchester over the last decade, though Leeds and Sheffield city areas have also experienced sharp drops.
“These falls are more than a simple source of frustration for the millions of people who aspire to own their own home. The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.”
As well as presenting a challenge for those living in the UK and wishing to take their first steps onto the property ladder, rising rental costs are making life difficult for anyone looking to relocate to the UK from elsewhere in the world.
This is something we’re seeing increasingly as relocation specialists. Businesses sending employees to the UK from overseas are finding it harder to source quality accommodation – whether for the short or long term. And, as we’ve seen, it’s not only those moving to the capital who are struggling.
HCR’s role, as experts in this field, is to work on behalf of employers to make sure those coming here to work have the most suitable homes – and then we negotiate the best prices.
For many, finding somewhere to rent – either as a temporary home or somewhere more permanent – is a huge challenge. We’ve already done the groundwork though and crucially we have a network of landlord partners across the UK.
Sourcing somewhere for an employee to live is relatively easy for us because of the close-working relationship we have with our partners.
It’s about maintaining the perfect balance between building great relationships with landlords (we can help them by providing high quality tenants from within the businesses we work with) and making sure we get the very best deals for our clients – despite the challenges presented by the UK’s current property market situation.