The housing crisis is an increasing concern across Europe, with shortages and escalating rents becoming more prevalent. Homelessness is also on the rise, posing a significant problem. According to the OECD, the UK has the highest rate of homelessness in Europe, having more than doubled over the past 13 years.
Housing tenure has undergone significant changes in the UK in recent decades. In England, the proportion of private renters surpassed that of social renters in the early 2010s for the first time in more than four decades of available data. Similarly, the gap between private and social renters has narrowed in Wales and Scotland, although private renters have not yet outnumbered social renters.
In 2022, approximately 64% of residents in England owned their homes. The homeownership rate was 61% in Scotland and 71% in Wales, based on government data.
Between 2002 and 2022, the proportion of owner-occupied households fell by 5.4 percentage points (pp) in England and 3.6 percentage points in Wales, indicating a clear downward trend. In Scotland, the rate remained relatively stable, despite minor fluctuations over the past 20 years.
At the beginning of the millennium, approximately 70% of homes in England were owner-occupied. However, this figure began to drop steadily after 2004, reaching its lowest point around 2015 at just below 63%. Despite a slight rise in recent years, owner-occupation remains well below its early 2000s peak, indicating a significant shift in the housing market.
Home ownership is becoming increasingly unaffordable as growth in house prices has outstripped growth in wages according to the UK Parliament notes.
In 1997, the median full-time worker in England could expect to pay about 3.5 times their annual earnings to buy a home; this had more than doubled by 2020 to 7.7.
In Wales, the percentage of owner-occupied households started around 75% in 2002, experienced a gradual decline, and stabilised just below 70% in recent years.
Private renters surpassed social renters in England in the early 2010s
Looking at the rental market since 1980, there has been significant shifts over the past four decades. In the early 1980s, social renting was predominant, accounting for over 30% of the housing stock. However, this proportion has steadily declined, dropping to below 20% in the early 2000s.
The social rented sector includes both local authority and housing association homes.
Conversely, the proportion of private renters has seen a notable increase. Starting at just above 10% in 1980, the private rental sector experienced gradual growth, with a marked acceleration from the early 2000s onwards.
By 2022, private renting surpassed social renting, stabilising around 19-20%.
Social rented housing is provided by a social landlord, typically a local authority or a housing association, with rents set at approximately 50% of market rates.
Policies impacting British housing tenure
These trends indicate a substantial transformation in the housing landscape, reflecting policy changes and economic factors.
"Policies over the last twenty years encouraged a strong buy to let market, with tax breaks, low mortgage rates, terrible savings rates etc. This has tightened up in recent years," Paula Higgins, Chief Executive of HomeOwners Alliance, told Euronews.
"The Right to Buy, introduced by British Prime Minister Margaret Thatcher, along with the Right to Acquire (buying one's housing association home), has taken properties out of the social rental sector," she explained, highlighting the changes in recent decades.
In their House of Commons research briefing, Hannah Cromarty and Cassie Barton stated that, in addition to Right to Buy sales and the conversion of properties from social rent to Affordable Rent, low levels of new supply of homes for social rent have also significantly contributed to the decline in the number of homes available for social rent.
A similar shift has occurred in Scotland and Wales, although the proportion of social renters still exceeds that of private renters in both regions.
In Scotland, the proportion of social renters declined from 30% in 2001 to 23% in 2022, while the share of private renters increased by over 5 percentage points, from 7.5% to 12.7%.
In Wales, the difference between private and social renters tightened significantly in the mid-2010s, dropping to below 2 percentage points.
While the gap was 12 percentage points in 2001, it has narrowed to less than 3 points as of 2022.
"Government has been prioritising private house building, via the Help to Buy scheme, and not affordable rent," Paula Higgins told.
Research conducted for the National Housing Federation in 2021, estimated that 8.5 million people in England are facing some form of unmet housing need. "For more than 4.2 million people, social rented housing would be the most appropriate tenure to address that need," the report suggested. This equates to 1.6 million households.
