The government’s annual Housing Survey is 50 years old this year. It has taken a snapshot 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. Now, more people own their home without a mortgage rather than having a mortgage as the number of 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 Halton, I wanted to see how we compared to the national picture. Therefore, focusing on the main four 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:
Halton - Tenure by Age
|Age||Owned Outright||Owned with Mortgage||Social Housing||Private Rented|
|Age 24 & Under||3.2%||10.7%||42.9%||43.2%|
|Age 25 to 34||2.7%||45.0%||27.2%||25.2%|
|Age 35 to 49||7.6%||57.4%||24.8%||10.2%|
|Age 50 to 64||33.3%||39.1%||22.0%||5.6%|
|Age 65 to 74||61.2%||9.6%||25.2%||3.9%|
|Age 75 +||62.1%||6.0%||26.5%||5.4%|
Looking at the stats, you can see that homeownership in Runcorn 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 the opposite was the case.
So how many local homeowners have paid off their mortgage?
42.3% of Runcorn and Halton homeowners are mortgage-free, yet of the 11,281 households that are owned by 50yo to 64yo in Runcorn and the Halton area, 54% of those people still have a mortgage.
As most people bought their first house in their early to mid 20’s back in the 1980s, this shows that a lot of Runcorn and Halton residents 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 6% of the Runcorn and Halton 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. Nationally however, 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 Runcorn rental properties will only increase, so good news for Runcorn buy to let landlords and indirectly Runcorn homeowners as well.