Home ownership in England and Wales is dropping drastically. This is no longer something that economists suspect, or that analysts quip about in articles about generation rent, it is a cold hard fact as shown by official UK census data.
According to the 2001 census the home ownership rate for England and Wales was 68.2%, and this is thought to have risen to around 70% during the boom years, before falling back to around 67% in 2010. But according to the latest data census the home-ownership rate in England and Wales was just 63.5% in 2011.
This is of course good news for buy to let investors, who have witnessed first hand the increasing demand for rental accommodation in England, Wales, and indeed across the UK – although the Irish census shows its home ownership rate still a high 69% as of last year. Scotland hasn't published the results from that part of its census yet.
The benefits to investors are confirmed in the census data, which shows private renting from landlords to be the most prolific of all forms of rented accommodation. According to the census while 9.4% of households in England and Wales rent socially (from local councils etc), 15.3% rent privately from landlords. That said, another 8.2% rent socially from other sources, making the total renting socially 17.6%, while 1.4% rent privately from other sources, making the private renting total slightly lower at 16.7%. Some 1.4% of households are fortunate enough to be living rent-free according to the census.
Short of a Christmas miracle which either completely turns the economy around or makes the banks friendlier to first-time buyers, or both, there is little reason to predict a change in this pattern of falling home-ownership any time soon, and people will always have to live somewhere. This makes the UK buy to let sector look like a promising short-term investment, as well as its obvious long-term benefits.
- Friday 21 December 2012