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17 November 2012

Dream of homeownership shattered for millions

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by Gill Montia

Dream of homeownership shattered for millions

The dream of homeownership is dying in Britain, according to the HomeOwners Alliance (HOA), a relatively new organisation set up to support existing and would-be homeowners.

In a new report, HOA claims that the UK owner occupation rate has fallen to 64.7% (a level last seen in 1988) having peaked at 69.7% in 2002.

The homeownership gap – the difference between those who want to own but can’t – has therefore hit five million.

London has been worst affected with most people now renting and just under half of properties in the Capital owner-occupied, the lowest level since records began in 1991.

The report estimates that the slump in owner occupied properties has resulted in a 1.4 million fewer homeowners than would otherwise have been the case. And by 2016 the shortfall is likely to increase to 2.4 million.

The study also outlines the causes of the crisis as follows: mortgages remain out of reach because of the deposits required by lenders; the gap between what people earn and house prices in the UK is amongst the worst in the world; at the heart of the problem is a chronic shortage of new homes.

Paula Higgins, chief executive of the HOA, says: “This decline in homeownership is depriving a generation of the chance to own the roof over their head, shattering their dreams and aspirations.”

She adds: “Buying your first home is no longer a joyful rite of passage for young adults, but returning to being a privilege of elites”.

Ms Higgins warns the social consequences of this will be profound with poverty among pensioners and children rising, social inequality worsening and more and more people facing life in insecure rented accommodation.

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