The Government’s Annual
Housing Survey is 50 years old this year. It has taken a snap shot of the UK’s property
market every year since 1969 and in the recently published report for 2018, it
wasn’t a surprise that owner occupation is still the most predominant tenure, yet
now more people own their home without a mortgage rather than having a mortgage
as the number people buying their first home (obviously with a mortgage) has
declined since the Millennium. The
report also shows homeowners (mortgaged and owned outright) are, on average,
older than renters and between the homeowners themselves, those who are
mortgage free are older than those with a mortgage.
Looking at the most recent
of data for Stoke-on-Trent, I wanted to see how we compared to the national
picture. Therefore, focusing on the main 4 tenures of owned outright, owned
with a mortgage, social housing (i.e. Council Housing and Housing
Association) and private rented, this is what I found out...
|
Stoke-on-Trent - Tenure by Age
| ||||
|
Age
|
Owned Outright
|
Owned with Mortgage
|
Social Housing
|
Private Rented
|
|
Age 24 & Under
|
2.4%
|
9.8%
|
29.7%
|
58.0%
|
|
Age 25 to 34
|
3.6%
|
40.4%
|
24.5%
|
31.5%
|
|
Age 35 to 49
|
9.0%
|
51.8%
|
23.7%
|
15.5%
|
|
Age 50 to 64
|
37.1%
|
32.4%
|
22.2%
|
8.3%
|
|
Age 65 to 74
|
63.9%
|
6.9%
|
24.1%
|
5.1%
|
|
Age 75 +
|
63.2%
|
3.6%
|
26.6%
|
6.7%
|
Looking at the stats, you
can see that homeownership in Stoke-on-Trent and council area as a whole (both
owned and owned with a mortgage combined) is lower in the 25yo to 34yo age
range compared to 35yo to 49yo, yet roll the clock back to the 1980s and
opposite was the case.
So how many local homeowners
have paid off their mortgage?
47.6% of Stoke-on-Trent
homeowners are mortgage free, yet of the 19,053 households that are owned by
50yo to 64yo in Stoke-on-Trent, 46.6% of those people still have a mortgage.
As most people bought
their first house in their early to mid 20’s back in the 1980’s, this shows
that a lot of Stoke-on-Trent people must have re-mortgaged in the past and
extended their borrowings (otherwise they should have paid their mortgage off
now).
The other thing that
concerns me is the 3.6% of the Stoke-on-Trent over 75yo homeowners that have a
mortgage.
If you amalgamate the national historic ranges going back to 1977 (see
the graph below “UK Households with a Mortgage by Age – 1977 to 2018” and note
the age bands are slightly different to the recent local stats because they
were carried out under different government departments), you will see the
number of people who own a property with a mortgage has been
dropping since the Millennium, yet nationally the number of people who own a
property has remained roughly the same, even with the growth of the private
rented sector.
Reports in the industry
suggest that in the next ten years that will increase, as nearly 1 in 5
homeowners will be still paying off their mortgage after retirement. One of the
reasons behind that will be the legacy of interest-only loans and delayed
first-time buying as we become more and more like Germany in our house
ownership models, where people naturally rent their homes until their 50’s and
then buy when they inherit money from their parents.
