UK’s 'fundamental desire' for home-ownership stays strong post-Brexit
The Council of Mortgage Lender's latest survey – conducted in the days after the Brexit vote – show that aspirations to home-ownership remain strong, says CML's Bob Pannell.
Some people, myself included, do not particularly like surprises and may on occasion react negatively to them.
The outcome of June’s EU referendum undoubtedly surprised many of us.
In that context, it is perhaps understandable that commentators, mindful of the far-reaching political, economic and social ramifications that Brexit may pose for the UK, have highlighted survey results that describe a sharp deterioration of sentiment.
But, as the dust begins to settle and our brains catch up with the changes that have taken place, we would do well to re-assess their importance against market fundamentals.
One such fundamental appears to be the UK’s strong bedrock desire for home-ownership.
We recently commissioned YouGov plc to undertake consumer research into tenure aspirations. The fieldwork was conducted online during the period 24 June – 7 July 2016, that is, in the immediate aftermath of the Brexit vote.
Given the timing, one might have expected the picture to look materially different from earlier surveys.
But, this turns out not to be the case!
The research is the latest in a long-running series we have commissioned, which shows that aspirations to home-ownership have remained consistently strong. And when we published a regional breakdown of data in 2013, it showed that the desire to be a home-owner was strong across the UK.
When asked about their preferred tenure in two years’ time, 72% of adults reported that they would like to be home-owners. Looking further ahead, 10 years from now, 80% of respondents hope to be home-owners.
While we cannot rule out the possibility that the Brexit vote may have dented the desire for home-ownership, the underlying preference for this tenure is clear. Indeed, the proportion of adults hoping to be home-owners in 10 years’ time remains in line with its 30-year average.
Aspiration and age
Notwithstanding the well-known affordability challenges facing younger adults looking to get on the housing ladder, at least four-fifths of all adults under 55 years old hope to be home-owners in 10 years’ time (the appetite for home-ownership dims a little among older age groups as health, care and welfare aspects emerge as considerations).
But not all younger adults wish to get on to the housing ladder quickly, as many view renting privately or living with family and friends as attractive short-term alternatives.
As always, there are major questions about whether home-ownership aspirations are realistic or sustainable, but fundamentally, the British love affair with home-ownership appears to have survived Brexit. In a world with few certainties, this may be one worth holding on to as we navigate the uncharted waters ahead.
Postscript: The CML will be publishing a full research report on tenure choice and aspirations in August.