RLA : RPI : >Home ownership to continue rise

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the October / November 2000 issue

Home ownership to continue rise - October / November 2000

Home ownership is likely to continue to grow, according to a new report from the Council of Mortgage Lenders.

Even if the proportion of homeowners in the population remains steady at 67 per cent, the trend towards more but smaller households forecast in Britain over the next 20 years implies a significant rise in the number of owner-occupiers, said the CML. But there is no reason to believe the 67 per cent figure represents a plateau, it concluded after studying home ownership trends in the UK, USA, Canada, Australia and New Zealand.

A recent slowdown in growth of owner occupation in Britain was put down partly to the decline in 'right to buy' sales down from an average of about 100,000 annually between 1981 and 1991 to a current level of 16,000. In all, the right to buy policies resulted in 1.4m sitting tenants becoming homeowners, said the CML.

But in the USA, where home ownership has reached the 60 per cent 'threshold', prolonged economic growth has nevertheless stimulated further growth in home ownership. One factor is that rising divorce rates have increased the numbers of older people living on their own.

Some 19,300 buy to let loans worth £1.6bn were advanced in the six months to June, the CML has reported. This compared with 19,200 loans worth £1.5bn in the same period last year. 'Despite the slight upward trend in interest rates earlier this year, buy to let loans continue to grow in popularity', said CML deputy director general Peter Williams.

Signs of a cooling off in the housing market have been reported in report from the CML and Department for Transport, Environment and the Regions. Although loans for purchasing houses still account for two thirds of borrowing, lending for properties fell from £7.7bn to £7.1bn in July. Rising house prices have dampened down first time buyer activity, said the CML, with the proportion among those taking out mortgages down from 46 per cent in May to 43 per cent.

other artilces from the October / November 2000 issue