Do we still buy into ownership?

David Smith: Home Economics

One of the surprises of recent months has been the increase in buyer interest recorded by both the Royal Institution of Chartered Surveyors and the National Association of Estate Agents. Even through deep economic gloom and sharply rising unemployment, our appetite for owning property is apparently undiminished, and may have been sharpened by lower prices.

Bob Pannell, head of research at the Council of Mortgage Lenders (CML), recently gave a presentation on the desire and expectation of home ownership. “We are going through a challenging and difficult transition, and lenders, developers, planners and households are all affected,” he said. “The result may be that the base of home ownership is a little narrower than in the past and the prospect of capital gains somewhat more modest.”

He took comfort from the fact that attitudes to buying appear to be stable through thick and thin. Surveys dating back to the early 1980s consistently show that between 80% and 90% of the three key age groups — under-25s, 25- to 34-year-olds and 35-to 54-year-olds — see home ownership as their preferred form of tenure in 10 years’ time. The big change has been in older age groups. Buying a home was once felt to be beyond their grasp, but Margaret Thatcher’s right-to-buy legislation and rising prosperity changed that. Today, actual home ownership in Britain is just under 70%.

A slightly different picture was presented this month by the National Housing and Planning Advice Unit, which was set up by the government to advise on housing supply. It commissioned the pollster YouGov to ask 18- to 34-year-olds about attitudes to housing. A fifth of those not currently owning plan to buy in the next 12 months. Otherwise, nonowners in this age group were lukewarm, with only 43% saying they aspired to buy, and seven in 10 expressing concern about the financial responsibility and commitment of ownership.

The surveys are not necessarily incompatible. The CML’s numbers include people who already have their own home, for whom still owning in a decade is natural. The YouGov survey highlights how many young people no longer regard ownership as a goal, and prefer the flexibility of renting. Perhaps 70% is as high as it can go.

– Bad news for young people trying to get their foot on the property ladder — last week, the consultancy firm Capital Economics predicted that parental help is not likely to increase in the near future. Although the percentage of first-time buyers being helped by family to gather a deposit has doubled in the past two years, the actual number of first-timers helped onto the ladder in this way has dropped by 25% since 2007, according to figures from the Council of Mortgage Lenders.

– Prime London suburbs are leading the way in the recovery, as expected. Figures from Knight Frank estate agency show that prices in parts of the capital such as Hampstead, Richmond, Wandsworth, Wimbledon and Fulham rose by 3.7% in the three months to the end of June. Stock is still low, though, with the supply of new property down by 40% compared with a year ago. (David Smith, The Sunday Times)

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