Home ownership
Contents |
[edit] Background
A house is most people’s biggest asset. It is a symbol of security and it is a stake in the future.
In her 1984 address to the National House Building Council, Margaret Thatcher said:
"The spreading of home ownership is a worthy philosophy. Why should not everyone in the UK be a man or a woman of property? It should be as common to own a house as it is to own a car because the UK is a nation of people whose history and character is one of independence. Where property is widely owned, responsibility and freedom flourishes. Frustration and anger is nurtured by those who are dispossessed with nothing to lose. Political freedom is supported by economic freedom. In Wilfred Blount’s words:
'Nor has the world a finer thing
Though one should search it round
Than thus to live one’s sole king
Upon one’s own sole ground'".
In five years of her government 1.7 million additional people acquired their own homes averaging 340,000 first-time buyers per annum. Home ownership reached 63% in England but research by the Housing Research Foundation suggested a goal of 80% was achievable.
[edit] Current situation
The Halifax First-Time Buyer Review published on 29 December 2012 reveals how little subsequent progress there has been. Halifax report that in 2011 there were just 193,000 first-time buyers and in 2012 there were 216,000. According to the English Housing Survey (ref. bulletin 7 July 2012), home ownership is now 66% and in London is less than 50%.
To better understand the reasons for the lack of progress, the period before the 2007 banking crisis is worth studying. 2006 produced 402,800 first-time buyers. This was at a time when mortgage payments consumed 50% of disposable income and required a deposit of 10%. In 2012, deposits were substantially higher, with many funding agencies looking for a minimum 20%. However, mortgage repayments were on average just 27% of disposable income due to historically low base rates.
This suggests that progress is hindered by the inability of first-time buyers to fund deposits.
The Halifax report suggests that parents prepared to help finance their children’s down payments has doubled since 2005. In 2012, 65% of first-time buyers had parental assistance.
[edit] Current strategy
- It is often suggested that scarcity of building land and planning regulations are the key obstacles to house building in the UK, and successive governments have focused their attention on both criteria - arguably to little effect. The Government has committed to releasing public sector land with the capacity for up to 100,000 new homes. In addition, the National Planning Policy Framework gives local authorities a duty to assess local demand for housing in their area.
- The Government's £80 billion Funding for Lending Scheme is intended to help bring down deposits by offering banks and building societies cheap finance if they increase lending to businesses or households. The Bank of England's quarterly Credit Conditions Survey (Q4 2012) sited the scheme as one of the main reasons that mortgage lending increased at the end of 2012 and projected further increases in 2013. However, the Halifax report suggests that at best this might reduce deposits by 5%.
- Where household income is below £60,000 per year, “First buy equity loan” schemes allow the government and house builders to provide 20% loan capital in return for shared equity in the borrowers house. However a cash deposit and a commercial mortgage are required for the remaining 80%.
[edit] Other possibilities
- It might benefit parents if residential property could be put into a self-administered pension scheme. Currently this is not allowed, even though a car, business premises or a factory can be in a pension scheme.
- Mortgage tax relief could be re-introduced for mortgages up to the average price paid by a first-time buyer in Greater London. The tax relief mechanism could include legally drawn up mortgages arranged with self-administered pension funds.
- Apart from providing a tax incentive to buyers who switch from renting property to ownership, this two pronged proposal might encourage parents to use their pension as a provider of mortgages to their children (possibly at a better rate of return than the pension funding markets are providing).
- The threshold attracting zero stamp duty could be raised to match the average price paid by a first-time buyer in the capital.
See also: Home owner.
[edit] Related articles on Designing Buildings Wiki
- Housing ladder.
- Housing market.
- Housing shortage.
- How can I improve my kerb appeal?
- Micro dwelling.
- Mundic.
- National Planning Policy Framework.
- Owner.
- Resident.
- Self build.
- Self build initiative.
- Shared equity / Partnership mortgage.
- Shared ownership.
- The rise of multiple property ownership in Britain.
- The state of UK construction August 2012.
[edit] External references
- Halifax press release: First-time buyer numbers at highest since 2007, But still nearly 50% lower than in 2006.
- English Housing Survey (bulletin 7 July 2012).
- Bank of England's quarterly Credit Conditions Survey.
Featured articles and news
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
CIOB Construction Manager of the Year 2025
Just one of the winners at the CIOB Awards 2025.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.