Two Million Fewer Future Homeowners Predicted, Warns Mis Sold Mortgage Company Simple Financial Solu

From: Mis Sold Mortgage
Published: Mon Apr 23 2012


The study showed that between 2007 and 2010 the number of loans for house purchases dropped by more than half, and predicts mortgage finance is unlikely to return to pre-2007 levels leaving a home ownership ‘gap’.

A combination of the house price boom and bust followed by the banking crisis has left many would-be owners out of step with the market. Those with poor credit histories, or unstable or low income have been the hardest hit in the mortgage market, a situation further compounded by changes in consumer regulation, and new and more stringent rules for lenders.

The current trend of home ownership is on the decline and if it continues will see just 15.5 million (60%) owner-occupied houses by 2025. However if home ownership can stay at today’s level of 67.4% then owner occupation would account for 17.4 million households.

Paul Hackett, Smith Institute’s director, is not optimistic.

"There is every reason to believe that home ownership levels will continue to decline and the private rented sector continue to grow. An increasingly large proportion of households will in effect be excluded from the benefits (and risks) of home ownership... wealth will be painstakingly acquired through personal saving."

A number of social, economic, political and demographic factors have been blamed for eroding people’s ability to buy a home. There are no longer jobs for life, resulting in more movement around the country to find work. In addition first-time buyers often have the burden of educational debt which prevents them saving what they need for a deposit and erodes the size of mortgage loan they can borrow.

A spokesperson for Mis Sold Mortgage Company Simple Financial Solutions, says: "Two million fewer owner occupied houses within 15 years is the kind of thing that can have far reaching impacts, not just on people’s lives but on the state too. In addition to leaving many with limited assets, those who have missed out on home ownership due to the recessions and lending policies of the banks are far more likely to end up dependent on the state in later life."

The report goes on to recommend a series of actions to try and halt the home ownership decline including amending stamp duty and other property-related tax revenues, as the report states: "It may even be that the coalition will wish to consider some tax concessions along the lines of mortgage interest tax relief [Miras, abolished for principal residences in 2000] to encourage access to home ownership."

However, it is unlikely that tax concessions alone will plug the homeowner gap. Organisations such as housing associations, which help renters buy part shares in a property while paying market rent on the rest, may have to ramp up their activity to cover any shortfall.

One thing is clear though. The traditional view of lifetime security through home ownership looks to have come to an end.
Company: Mis Sold Mortgage
Contact Name: Dave
Contact Email: dave@simplefs.co.uk
Contact Phone: 0800 043 2027

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