According to the House Builders Association (HBA), the fall in home ownership is a consequence of fewer SME house builders operating in the sector.
A recent report by the Resolution Foundation showed that home ownership levels have dropped to their lowest recorded level since the 1980s. In fact some regions have been particularly badly affected, with the Greater Manchester area seeing a 15.8% fall in home ownership since 2003, for example. This trend has mimicked the contracting of the SME house building sector, which previously contributed the majority of new homes being built in the UK.
Rico Wojtulewicz, the policy advisor for the HBA, said:
SMEs once built the majority of our homes. They were our collaborative partners and kept the housing market competitive. Yet, in 2016, their market share is below 30% with the sector shrinking by 60% since 2003.
Mr Wojtulewicz attributes this worrying trend to a failure by central and local government to put in place mechanisms to encourage sustainable levels of delivery. As a result of this, there is more unaffordable housing on the market, a shortage of skilled construction workers being trained in smaller companies and a situation where supply has overtaken demand. Furthermore, there is a lack of a truly diverse range of housing available on the market to suit every demographic.
In major cities such as London, Manchester, Birmingham and Liverpool, for example, there is trend for building one or two bedroom flats for professionals, with many families being priced out of the metropolitan areas due to a lack of affordable homes.
Mr Wojtulewicz suggests that government cuts to local budgets have reduced the number of smaller scale, affordable house building projects. This, in turn, has left home ownership levels at their current low.
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