Public perceptions of housing in the UK - what will the housing mix look like in five years' time?
In the run up to our annual conference in Manchester last week, we employed Ipsos Mori to carry out some polling focused on the state of the housing market at the moment and people’s feelings about how it might change in the future. Policy and practice officer David Pipe summarises the results.In the run up to our annual conference in Manchester last week, we employed Ipsos Mori to carry out some polling focused on the state of the housing market at the moment and people’s feelings about how it might change in the future. You may have already seen the headline finding from their report, that 79 per cent of the public agree that today’s young people will have a hard time getting the right kind of housing, even if they work hard and get 'good' jobs.
Just as interesting though was what members of the public told us about the type of housing they lived in 10 years ago, the type they live in now and the type they think they will be living in in another five years. The diagram below shows how this changes over time. Read left to right, the coloured lines indicate where people have/are expecting to either stay in the same type of housing or to move between tenures.
Click on the image above to enlarge or download PDF version
Looking ahead to where people expect to be in five years time, two things stand out:
- There is a significant group of people who expect to go from owning with a mortgage to owning outright. 28 per cent of respondents said that they owned outright 10 years ago, rising to 31 per cent now and 38 per cent in five years time. Given the demographics of our population, this is not a surprise. The proportion of home owners who are mortgage free has been increasing for some time and will continue to do so as a generation of ‘baby boomers’ approach retirement and successfully pay off their mortgages
- There is also a significant group of people who currently rent but who expect to buy a home in the next five years. While 22 per cent of respondents rent privately at the moment, only 15 per cent expect to still be doing this in five years time. This is more surprising.
The private rented sector has been growing steadily since the early 1990s, when it housed just nine per cent of households in England. Everything we know about the housing market tells us that, despite the government’s concerted efforts to make home ownership more affordable, private renting is likely to become even more common in the future. For example PWC have estimated that by 2020 the number of private renters in England will rise from 5.4m to 7.2m, or from around 20 per cent of the market to something closer to 25 per cent.
Much of what our survey respondents said when asked about home ownership in less personal terms also supports this - view full results here. 84 per cent said that it will be harder for young people today to get the housing they want in the future, 83 per cent said politicians should be more honest about people’s future prospects for owning and 51 per cent even said that as a country we are too obsessed with owning property. Nevertheless, while the public clearly see a role for renting overall, a significant number of renters still believe that they personally will buck the trend. No doubt some of them will but in England levels of home ownership have been declining steadily since 2003, and there is little evidence that this trend is likely to be reversed over the next five years.
So what can we conclude from this? The desire to own is clearly still strong and it is not unreasonable for government to want to support those who can afford it to enter home ownership. But we think that government policy is still skewed too heavily towards this. It is neither possible nor desirable for everyone to be a home owner and in reality at least some of those who plan to move into ownership in the next five years are likely to find that this is more difficult than they had hoped, even with government assistance.
So when formulating housing policy we need to give greater consideration to the one third of households who rent, either privately or from a social landlord, and to lower income households more generally. At the moment government plans to spend £45bn on housing over the next five years, but just £2bn (four per cent) of this will be spent on affordable housing to rent. If we want to meet the housing needs of people on all incomes, we will need to look again at this balance.