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Fall in Home Ownership Fuels Growth in Private Rented Sector

With house prices reaching unprecedented levels and affordability barriers deterring first time buyers from stepping onto the property ladder, more people are turning to the private rented sector, says the Resolution Foundation.

With house prices reaching unprecedented levels and affordability barriers deterring first time buyers from stepping onto the property ladder, more people are turning to the private rented sector, says the Resolution Foundation.

New data from the think tank shows that home ownership in England has fallen by 7 percentage points from its peak in 2003, where it stood at 71%, to just below 64% this year - the lowest level of home ownership since 1986.


Acute drops in home ownership have also been recorded in regions outside of London; with Greater Manchester’s home ownership rate plummeting from its peak in 2003 of 72% to just 58% this year.


Similarly, South and West Yorkshire, as well as the West Midlands Metropolitan area have all experienced double digit falls since the early 2000s peak.


The significant change in ownership levels is said to have been caused by a rapid acceleration in house price growth across the UK, far exceeding the rate at which the average income has risen.


With larger deposits and greater capital now required to purchase their first home, younger generations are increasingly turning to the private rented sector to find accommodation, says the report.


Whilst the number of home owners has fallen, there has been a parallel increase in the proportion of tenants moving into the private rented sector (PRS). In 2003, there were just 11% of people in the UK living in the private rented sector. In 2015, this figure rose to 19%.


Hand in hand with a fall in home ownership is a rise in the proportion of private tenants. In 2003 the number of people in the private rented sector was 11%, whereas in 2015 this figure rose to 19%.


In Greater Manchester, the proportion of households renting privately has been more pronounced, rising from 6% to 20% over the same period.


Meanwhile, the rental market has remained steady, even in the wake of the Brexit vote.

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