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 (more often than not with a mortgage) has declined since the Millennium. The report also unsurprisingly 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 Ashford, 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 the Ashford council area as a whole (both owned and owned with a mortgage combined) is lower in the 25 to 34 year old age range compared to 35 to 49 year olds, yet roll the clock back to the 1980s and the opposite was the case.
So how many local homeowners have paid off their mortgage?
45.6% of Ashford homeowners are mortgage free, yet of the 10,275 households that are owned by 50 to 64 year olds in Ashford, 54.3% 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 Ashford people must have re-mortgaged in the past and extended their borrowings (otherwise they would have now paid that mortgage off).
The other thing that concerns me is the 6.4% of the Ashford homeowners over 75 years old that have a mortgage.
If you amalgamate the national historic ranges going back to 1977 (see graph below 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.
Industry reports suggest in the next ten years that number of retired mortgagees will increase, with nearly 1 in 5 homeowners will be still paying off a mortgage in 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 home-ownership model: where people naturally rent a home until their 50’s and then buy when they inherit money from their parents.
In the meantime, demand for Ashford rental properties will only continue to increase … so good news for Ashford Buy to Let landlords and, indirectly, Ashford’s homeowners as well!