Friday, 06 March 2015 00:00

Home owners outnumber mortgage borrowers for first time

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Home owners outnumber mortgage borrowers for first time Home owners outnumber mortgage borrowers for first time

Rise in young buyers 'locked out' of housing market means leaves number of outright owners higher than number of people with a mortgage.

More people own their home outright than have a mortgage, official figures show, after a decline in young buyers gaining a foothold on the property ladder.

For the first time the number of mortgage-free homes exceeds the number where dwellers are paying off a loan, according to the English Housing Survey.

The data, collected in 2014, showed there were 7.4 million outright owners against 6.9 million with a mortgage. A year earlier the numbers had been equal.

Experts said it was further evidence that young people were being "priced out" of the property market and faced a "deepening social divide" between the generations.

While older borrowers were coming to the end of mortgage terms and taking advantage of low interest rates to pay down debts faster, fewer young people were able to buy. Almost half of households where the occupants were aged 25-34 were private renters, while just 36 per cent had taken on a mortgage or owned outright.

 David Hollingworth, of mortgage brokerage London & Country, said: "This is a completely different property market to 30 years ago.

"At one end, it's very difficult for young people to qualify for a mortgage, due to tighter affordability rules and high prices. At the other, older owners have never seen interest rates so low and are naturally coming to the end of their mortgage terms."

The number of owner-occupied properties peaked at 71 per cent in 2003. It has fallen every year since.

Dan Wilson Craw, founder of lobby group Generation Rent, said: "Outright owners outnumbering mortgage holders is a sign of a deepening social divide between people with property and those without."

Duncan Stott, director of PricedOut, another campaign group highlighting the plight of would-be buyers, said: "Unaffordable house prices have locked a generation out of homeownership.

"From these trends we can forecast that within seven years there will be more households renting than owning and paying off a mortgage.

"Unless we see action from government to get the housing market in fit shape for first-time buyers, we will inevitably see more and more working people stuck in the unstable private rented sector."

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