The structure of the UK housing market is undergoing a fundamental shift, according to a new report by Savills. The company also reports that the number of new households entering into owner occupation fell by -55% in the past year alone.

Savills report: ‘Two recently published housing market surveys highlight the beginning of change in the UK housing market. The affects of tighter mortgage lending criteria and the broader economic situation have filtered through to household behaviour as shown by the English Housing Survey and a report from the National Centre for Social Research (NCSR).

‘Ultimately, we believe the extent of these changes could be far more influential than the ‘right to buy’ introduced by Margaret Thatcher in The Housing Act 1980. The report published by the NCSR concluded that, given the size of the deposit now required to obtain mortgage finance, the prospect of homeownership is unrealistic for 64% of current non-homeowners.’
The situation appears unlikely to change unless 100% LTV mortgages return because Savills say that only 14% of those non-homeowners are actively saving towards a deposit at the moment. Rents look likely to continue rising though as Savills report that the number of new households entering the private rented sector increased by 21% last year.