For the first time since 1988 the percentage of owner-occupied homes in the UK is likely to have dropped behind that of France, according to figures from Eurostat, the EU’s official statistics bureau reports the dailymail.co.uk
Home ownership among Britons fell to 64.6 per cent in 2013 – that compares to 70 per cent in 2005.
Present trajectories strongly suggest that 2014 data will show that owner-occupancy rates will have fallen behind those in France, which stood at 64.4% in 2013.
Not since 1988 has the rate been so low, according to separate data from the Department for Communities and Local Government.
The Rise of Buy to Let
As private home ownership has fallen, the buy to let industry has grown substantially. Of the 2.5 million homes built between 2000 and 2012, 2.1 million were bought for use in the private rented sector.
More stringent mortgage approval standards have made it harder for private buyers to borrow, while many buy to let investors can obtain interest-only loans. They can also offset interest payments against their tax liability.
According to the Intermediary Mortgage Lenders Association (IMLA), buy to let loans have financed 1.4 million property purchases since 1996 – of a total 2.6 million additional private sector rented homes.
The IMLA has forecast that in twenty years the majority of Britons will be renting – a situation not seen since the early 1970s.
A key difference between the property ownership of the 1970s and 2035 is likely to be that instead of most rented property being state-owned, it will be owned by buy to let investors.
Current trends suggest that for prospective homeowners the future looks bleak but for landlords or those wishing to invest in the buy to let market there will be ever more opportunities for buy to let investors in the coming years.
If you are in the process of making such a buy to let investment, whether you are simply adding to your rental portfolio or becoming a first time landlord, make sure your property is protected with a good quality landlord property insurance product. Remember that for those with portfolios of buy to let properties, you can insure them under a single policy which normally gives preferential terms over a multitude of individual properties.
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