Obsession with ownership undermining the market

20 2008
An obsession with home ownership is creating major instability in the UK housing market, according to a leading US economist.

Dr Ian Shepherdson spoke candidly at the recent annual Chartered Institute of Housing (CIH) conference, drawing comparisons between the current plight of the UK and the latest housing crash in America, which many experts believe triggered the credit crunch.

He explained that a fatal combination of low interest rates and indiscriminate lending in America between 2002 and 2005 tempted millions of people into buying their own homes.

He also highlighted the role played by the sub prime sector, which turned the heads of previously satisfied young renters by offering seemingly cheap mortgage products without making the terms clear.

Dr Stephenson's comments are supported by the fact that home ownership levels sat at around 64 per cent for over 30 years in America, but by 2005 this figure had been pushed up to nearly 70 per cent by sub prime transactions.

CIH chief executive Sarah Webb said: "The nation often seems obsessed with home ownership. If you are one of the 45,000 people that get their first home repossessed this year then owner occupation won't have proved to be the route to personal wealth."
ADNFCR-1219-ID-18649715-ADNFCR

Related Articles
Rental investment remains strong in north-east
Investment in rental properties has remained sustained in the north-east...

Properties in the capital take 7.5% dive
Top properties in London are falling at record levels, it has been...

Pensioners could increase falls in property prices
Britain is currently home to 1.7 million pensioners who are relying on the...

BBA and Rics agree that housing market will not improve for months
The British Bankers Association (BBA) has suggested that house prices are...

House price declines 'slowing but not finished'
Recent slowdowns in the speed at which house prices are declining in value...