R e a d i – M o v e . c o m

Home ownership has plunged to its lowest level for nearly two decades, official figures revealed yesterday.

The research highlights the nightmare of millions of Britons, particularly the young, who may never be able to afford to buy their own home.

Just 67.9 per cent of English households own their home, the lowest percentage since 1991, according to the Government’s English Housing Survey.

Buyers are being crippled by the combination of soaring house prices, modest salaries and a mortgage drought which many fear is going to get worse.

Experts warned yesterday that many people should accept that home ownership was a dream which will never become a reality.

Tory housing spokesman Grant Shapps said: ‘Home ownership is falling under Labour, with the lowest number of first-time buyers since 1974 and fewer homes being built than at any time since 1946.

‘The Government’s housing policy has been exposed as a failure.’

As the level of ownership has plunged, the number of people forced to rent has soared.

Since 2001, an extra one million households in England are privately renting, taking the number to three million, according to the authoritative survey.

Nearly 60 per cent of those renting privately said they hoped to be able to buy in the future.

But Liz Peace, chief executive of the British Property Federation, warned millions of Britons must accept that they may be

‘permanent renters’. She said: ‘It is sad to say that while we would all like a Porsche and a month in Rio each year, some of us have to make do with a Toyota and a week in Majorca.

‘Similarly, for many, home ownership will remain an aspiration.’

Yesterday’s research comes after housing minister John Healey was criticised for saying he was ‘not sure’ that a fall in home ownership was ‘such a bad thing’.

Mr Healey added: ‘ Fundamentally, we need more affordable homes.’

He said Labour would invest more than £7.5billion over the next two years to build more affordable homes to buy or rent, and to help first-time buyers onto the housing ladder.

House prices will rise more than six per cent during 2010 and will be around 20 per cent higher than today’s levels by the end of 2013, according to the Centre for Economics and Business Research.

The CEBR has revised up its housing forecasts thanks to an improvement in availability of mortgages and more loan approvals. It also believes that interest rates will stay at 0.5 per cent until at least mid-2011.

Though it thinks rising unemployment and cuts in public sector spending will keep the lid on the market in 2011, it expects an overall shortage of homes will push prices up further in the following years.

Scarce: House prices will keep rising due to a shortage of supply, says the CEBR

However, Hometrack’s monthly housing survey showed a rise of just 0.1 per cent in January, suggesting this year has got off to a slow start.

Mortgage lending jumped by 14 per cent during December as people rushed to buy a home before the Government’s stamp duty holiday ended, figures showed today.

A total of £13.7 billion was advanced during the month, up from £12.1 billion in November, the Council of Mortgage Lenders (CML) said.

Lending was also 3 per cent higher than it was in December 2008, the first time the annual comparison has been positive since October 2007.

The CML said the figure was ‘surprisingly strong’ for December, when lending is usually down on November’s level as the housing market slows down ahead of Christmas.

It attributed the rise to increased demand as people buying properties costing up to £175,000 rushed to complete their purchases before the threshold at which stamp duty kicks in returned to £125,000 at the beginning of this year.

CML economist Paul Samter said: ‘Evidence suggests that the rise was driven by a surge in house purchase completions as remortgaging still remains exceptionally weak. 

‘The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday.’

He warned that if there had been a ‘bunching’ in sales as people rushed to beat the deadline, there could be a larger than usual drop-off in lending in the early part of this year.

A total of £143.7 billion was advanced during the whole of 2009, 43 per cent down on 2008, and the lowest annual figure since 2000.

However, lending for the year was slightly ahead of the CML’s forecast of £141 billion.

The group expects a gradual improvement in lending levels during the latter part of this year.

Mr Samter said: ‘With a gradual pick-up in economic growth and wider access to credit, 2010 will almost certainly be a better year in the mortgage market than 2009.’