The myth of home ownership

A report was published by the Resolution Foundation just after Christmas that looked at home ownership.

The report’s authors, Lindsay Judge and Adam Corlett, challenge the myth that home ownership now stands at 64% (well down over the last decade). They say that this figure only reveals the proportion of properties which are owned by an occupier rather than the proportion of the population who do own their own homes.

kemp-street-2They give the following example of a person who buys a house but then takes in three lodgers. “On the standard measure, this siply counts as an owner-occupied household – and the three residents that rent drop out of the picture. Or consider an adult returning to the parental home. That individual also disappears from the statistics. And five unrelated people who share a house? They would be counted as one rented household rather than the five separate renters that most would intuitively regard them to be.”

They say that official statistics have over-estimated home ownership. Official statistics suggest that home ownership peaked at 71 per cent in 2004 and has since fallen back to 64 per cent. Judge and Corlett argue that, from a family perspective, the peak was around 58 per cent in 2002 and that barely half of all families own their own homes today.

The government’s policy is to encourage home ownership. Today the government has made an announcement about starter homes where those aged between 23 and 40 can get a 20% discount on new homes built on brown field sites. As I have argued many times on this blog, in an area like Brighton and Hove, it is unlikely that the majority of local first time buyers will be able to buy even with the opportunities and incentives offered by government.

Private renting is the reality for a growing minority of households. For these households, at the sharp end of the housing crisis, the priority is security of tenure and affordability. There is little coming from government that will ease their situation.

Home ownership is not the answer to the housing crisis. Supply, affordability and security of tenure is needed.

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