Is an Englishman’s Home His Castle?

14th March 2018

It is often said that people in the UK have a real love affair with owning their own property.

In this week’s blog, Maddisons Residential, the multi award-winning estate and letting agent in The Pantiles, looks at home ownership statistics in England and the UK and compares them with other countries.

It sheds some light on whether buying a home is still the goal for many people and families around the world.

The English Housing Survey

If indeed we do have a love affair, it might be surprising to learn that the English Housing Survey 2015 – 2016 published on 2nd March 2017 revealed that home ownership in England has fallen to its lowest level for 30 years, while the number of people privately renting is now higher than in the early 1960s.

In fact, looking at the UK as a whole, it has the fourth lowest home ownership rate in the EU.

This survey produced by the Department for Communities and Local Government (DCLG) found that of the estimated 22.8m households in England, 14.3m (62.9%) were owner-occupiers in 2015-16. This is down from a peak of 70.9% in 2003 and is the lowest figure since 1985, when it was 62.4%.

By stark contrast, the private rented sector has grown in size and now accounts for just over 4.5m households, which is double the 2.3m in 2004.

Ownership versus Renting in Europe

Most Europeans are far more likely to own their homes than people in the UK. The statistics show that over 96% of Romanians own their own homes, and 89% of Lithuanians. Eastern Europe may show truly exceptional figures, but the UK is now behind France and the Netherlands as well.

Patterns of home ownership in the EU are quite varied. In Germany less than 50% of the population are homeowners, whereas over 80% of Spanish people do own their own homes. The Germans do prefer to rent, as do the Swiss.

Eurostat Data

Eurostat, the statistical office of the European Union situated in Luxembourg whose mission is to provide high quality statistics for Europe, can provide even more detail.

When looking at property markets in the EU, there are marked differences regarding the actual tenure of the property and the statistics as to who owns or rents their home – although the data generally indicates that across Europe there has been an increase in home ownership.

According to the EU-SILC survey, 69.3% of all households in the EU-28 were owner-occupied in 2016, while tenants lived in 30.7% of properties.

Highest versus Lowest Home Ownership

It might be surprising that the highest home ownership rates were recorded in the eastern EU Member States and the Baltic Member States. For example, 90% or more of the dwellings in Croatia, Lithuania and Romania were owner-occupied.

By contrast, the highest proportions of rental properties were in Germany (48.3 %) and Austria (45.0 %), with an even higher share in Switzerland (57.5 %).

The lowest rates for owner-occupancy were recorded in the German and Austrian capital regions, 15.3 % in Berlin and 19.0 % in Wien. Of the remaining 12 regions, seven were from Germany, while the other five regions were all capital regions, namely those of Sweden, the United Kingdom, Belgium, Denmark and the Czech Republic.

Renting is Just a Good Deal in Germany

Although Germany has the most successful economy in Europe and is basically a wealthy country, it has one of the lowest home ownership rates in Europe and is way behind the US.

The root of this lies in its history, as over 20% of homes were reduced to rubble at the end of the war. Home building boomed as a consequence and the majority of the new housing units were rentals. Today the rental market is robustly regulated and these regulations are favourable to renters.

The American Dream

Another country where home ownership has been considered part of the dream, is the USA. As with it comes a sense of pride and security, control, stability and, of course, no more landlords.

However, the US is still feeling the impact on its housing market from the Great Recession, which began in late 2007 and lasted for nearly two years. Here, the bottom literally dropped out of the market and it has been slow to recover.

More than 20 million foreclosures were filed during the decade and RealtyTrac data indicates that a massive 7.3m consumers lost their homes between 2007 and 2014. House prices had effectively reached a peak in 2006 and the fall was dramatic and by as much as 30-35% in some cases.

Ten years ago, the national percentage of households renting in the US was about 30%, whereas today it’s approximately 37%.

What to Do Next

If you are looking to buy or rent a home, Maddisons Residential in The Pantiles would be delighted to show you their portfolio of houses to buy and properties to rent throughout Kent and Sussex. Please call their friendly and knowledgeable team on 01892 514100 or visit their stunning offices in The Pantiles of Tunbridge Wells.