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 Warrington, 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...
Looking at the stats, you can see that homeownership
in Warrington 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?
44.2% of Warrington homeowners are mortgage free, yet of
the 18,560 households that are owned by 50yo to 64yo in Warrington, 51.8% 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 Warrington 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 5.9% of the Warrington
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.
In the meantime, demand for Warrington rental
properties will only increase … so good news for Warrington Buy to Let
landlords and indirectly Warrington homeowners as well.
Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.
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