London’s housing crisis is coming to Birmingham.
The number of people in Birmingham and the surrounding area who own a home of their own has plummeted - and the number forced to rent from private landlords has shot up.
And this has hit people in the wallet, because renting privately often costs more than paying a mortgage.
The warning comes in a new study which warned that the housing crisis is no longer confined to London and the south east, and is now spreading to the Midlands and the North of England.
Data from leading think tank the Resolution Foundation show that the proportion of the West Midlands population who own their own home has fallen from 70.5% back in 2005 to 59.3% today.
In other words, it’s fallen from more than seven out of ten households to less than six out of ten.
What proportion of West Midlands households own their home?
At the same time, more people are forced to rent from private landlords than ever before.
The proportion of households renting privately more than doubled, from 8% to 17%.
The figures refer to the West Midlands county, which includes Birmingham, Sandwell, Walsall, Dudley, Solihull, Wolverhampton and Coventry.
There has been a lot of debate in Parliament and elsewhere about the difficulty of buying a home in the south east, and the problems some tenants face when they are forced to rely on private landlords.
But the think tank says it’s time to consider how to fix the housing crisis in the rest of the country too.
And it warned the shift from home ownership to private renting – which has particularly affected young people – is concerning for a number of reasons.
Households in the private rented sector spend a higher share of their income on housing than those who own a property and pay a mortgage.
Renters are also likely to face insecurity because they have short-term contracts, while the struggle to buy property makes it harder for people to accumulate wealth that they may rely on in later life.
Stephen Clarke, Policy Analyst at the Resolution Foundation, said: “London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the north of England.”
He added: “These drops are more than a simple source of frustration for the millions of people who aspire to own their home. The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.
“We cannot allow other cities to edge towards the kind of housing crisis that London has been saddled with. It’s encouraging that the new Prime Minister has talked about tackling the housing deficit. She may find that making good on this promise could secure as important a legacy as negotiating a successful exit from the European Union.”
A Department for Communities and Local Government spokesman said more than 300,000 people have been helped into home ownership through government-backed schemes since 2010, and a more than a decade-long decline in home ownership has stopped.
He added: “However, we know there is more to do, which is why we’ve set out the most ambitious vision for housing in a generation, including delivering hundreds of thousands of homes exclusively for first-time buyers.”