Housing Affordability
- Average mortgage advance as % of dwelling price, 1997-2008
- Average mortgage advance compared to average household income, 1991-2008
- Households by council tax band in Great Britain, 2008/09
- Repossessions and arrears, 1991-2008
- Buy-to-let loans, 1999-2008
- Weekly rents of council tenants across the UK, 2007/08
- Weekly rents of private renters across the UK, 2007/08
- Housing benefit recipients by tenure in Great Britain, February 2010
- Housing benefit recipients in Great Britain, 1988-2009
- Rent rebate housing benefit recipients in Great Britain, 1988-2009
- Rent allowance housing benefit recipients in Great Britain, 1988-2009
Average mortgage advance as % of dwelling price, 1997-2008
This graph shows the UK average mortgage advance as a proportion of overall dwelling prices from 1991-2008. The advance is the average percentage of funds provided to individuals for their household mortgage by a lending institution.
This ratio highlights the stability in the proportion of advance to dwelling price for moving owner-occupiers, which hovered between 60% and 65% over the period. The proportion for first-time buyers by contrast has fluctuated from a high of 90% in 1996 to a low of 76% in 2003.
By 2007, mortgage advances formed over 80% of dwelling prices for first-time buyers compared to just over 60% for moving owner-occupiers. The economic downturn sparked a downward trend in 2008, with advances for first-time buyers dropping from 81.9% in 2007 to 76.1% in 2008 and advances for moving owner-occupiers dropping from 62.4% in 2007 to 59.9%. These figures closely resemble the ratios seen in 2004.
Source: UK Housing Review, 2009: 148-9
Average mortgage advance compared to average household income, 1991-2008
This graph shows the UK average mortgage advance compared to average household income from 1991-2008, which is a measure of housing affordability. The advance is the average percentage of funds lent to people for their household mortgage by a lending institution.
It shows that the average mortgage advance has always been more than twice the level of average household incomes, except for a brief period in 1995 and 1996 when it dropped below this.
It demonstrates how first-time buyers always bear a higher mortgage advance relative to moving owner-occupiers in the UK and that the gap widened during the mid-1990s and then narrowed in 2000.
This gap has gradually widened again over the 2000s and in 2004 saw the ratio of advance to income exceed 3:1 for first-time buyers, a picture that continued in 2007. While the economic downturn brought a reduction in 2008, the ratio remains high when compared to historical patterns, suggesting major housing affordability problems persist.
Source: UK Housing Review, 2009: 148-9
Households by council tax band in Great Britain, 2008/09
This graph shows households by council tax band for Great Britain. The graph provides a general indication of this element of housing cost for different households and its variation by country. It is important to note that the council tax band of a property is not related to its current market value. This is because, by law, council tax valuations are based on the price a property would have fetched if it had been sold on 1 April 1991.
Within England the most common council tax band is the lowest Band A at 24%. The most common tax band in Wales is both Band B and Band C at 21% each while Scotland's most common tax band is Band B at 23%
It is interesting to note that England has a smaller proportion of properties evaluated at the higher value bands of E, F and G (9%, 5% and 3%) compared to Wales at 14%, 8% and 4% and Scotland at 13%, 7% and 5% respectively.
Wales differs markedly from the other countries in the overall percentage of Band A households; these comprise only 13% of households, compared to England’s 24% and Scotland’s 21%.
Source: Department for Works and Pensions, 2010
Repossessions and arrears, 1991-2008
This graph notes the number of home repossessions during each year and the number of mortgages with over six months' arrears, which is useful for examining how sustainable it is for individuals to remain as owner-occupiers.
Some of those in long-term arrears may face repossession of their home by mortgage lenders.
There was a decline in the number of repossessions from 75,540 cases in 1991 to only 8,200 cases in 2004 across the UK. However, repossessions began increasing in 2005. From 2007 to 2008 repossessions increased substantively from 25,900 to 40,000 as the economic downturn set in.
Similarly, the pattern of mortgage arrears declined from its peak of 352,000 in 1992 to 40,900 in 2004. However, this number has increased again since 2004, again nearly doubling from 55,800 to 101,500 between 2007 and 2008.
Source: UK Housing Review, 2009: 159
Buy-to-let loans, 1999-2008
This graph shows both the number of new lending cases for buy to let and the average value of new buy-to-let loans from 1999 to 2008.
The rising housing market since the 1990s has made housing an attractive investment option and the buy-to-let market has been particularly buoyant, causing both the number of cases and their value to rise steadily since 1999.
The number of new lending cases rose from 44,400 cases in 1999 to 346,000 new cases in 2007. This was followed by a dramatic decrease in 2008 to 222,700 new cases.
The average value of buy-to-let loans has also increased from £70,000 in 1999 to £129,000 in 2007, with only a minor decrease in 2008 to £122,000.
There is considerable uncertainty, however, about how the activities of buy-to-let landlords will affect the housing market as it recovers from the current recession.
Source: UK Housing Review, 2009: 165
Weekly rents of council tenants across the UK, 2007/08
This chart shows the range in costs of weekly rents of council tenant households across the UK. This is useful for understanding varying council rental conditions across the four nations.
Within England, 50% of council tenants pay less than £60 a week in rent compared to 65% in Wales and 66% in Northern Ireland. Scotland has the largest percentage of council tenants paying less than £60 a week at 90%.
The highest council rents are evident in England and Northern Ireland, where 14% and 9% of council tenants respectively pay more than £80 a week . In both Wales and Scotland, less than 2% of council tenants pay more than £80 a week and none pay more than £100 a week in either country.
Source: Department for Works and Pensions, 2009
Weekly rents of private renters across the UK, 2007/08
This chart shows the range in costs of private renting for households in the private rented sector across the UK. This is useful for understanding varying private rental market conditions across the four nations.
Over a quarter (26%) of private rented sector tenants in England pay £150 or more in weekly rent, compared to only 7% in Wales, 9% in Scotland and 2% in Northern Ireland. At the opposite end of the spectrum, 11% of all private renters in England pay less than £20 per week, compared to 12% in Wales, 24% in Scotland and 12% in Northern Ireland.
In Great Britain, private tenants commonly pay between £100 and £150 rent per week: the proportions of households in this category are 33%, 28% and 28% respectively for England, Wales and Scotland. In Northern Ireland, rents are often lower and about a third (33%) of private tenants pay between £80 and £100 per week.
Source: Department for Works and Pensions, 2009
Housing benefit recipients by tenure in Great Britain, February 2010
This graph shows the percentage distribution of housing benefit recipients by different types of tenure in Great Britain in February 2010.
Housing benefit recipients include local authority tenants in receipt of rent rebates as well as housing association and private rented sector tenants receiving rent allowances. This indicator is useful for understanding the roles played by both the public and private sectors in the provision of housing to people on low incomes.
A significant proportion of housing benefit recipients in both England and Wales comes from the social rented sector (70%) and a smaller proportion comes from the private rented sector (30%). Scotland has an even greater prevalence of housing benefit recipients in the social rented sector (82.3%) compared to the private rented sector (17.7%), possibly suggesting a higher prevalence of available social housing.
Source: Department of Work and Pensions, 2010
Housing benefit recipients in Great Britain, 1988-2009
This graph shows the number of housing benefit recipients in Great Britain between 1988 and 2009 (data for 2008 is not available).
Housing benefit recipients include both individuals in receipt of rent rebates (which cover local authority and new town tenants) and rent allowances (which are provided to housing association and private tenants). Housing benefit recipient numbers are an indicator of individuals’ ability to pay for housing. The benefit is an income-related benefit designed to help people across all tenures on low incomes pay for rented accommodation whether in or out of work.
The number of housing benefit recipients in Great Britain remained relatively stable between 1988 and 2009. Sharp increases were first found during the first half of the 1990s, when there was a recession. Between 1990 and 1995, housing benefit recipients rose from 3,238,000 to 3,953,000 (an increase of 22.1%) in England and 206,000 to 239,000 (a rise of 16%) in Wales. In contrast, Scotland saw a peak in housing benefit recipients in the later half of the decade, when the number rose to 570,000 in 2000.
The economic downturn of the late 2000s led to another rise in the number of housing benefit recipients in 2009. Between 2007 and 2009 the number in England increased to 3,715,000 (a 9.2% increase). Similar rises were also found in Wales with a rise to 220,000 recipients (a 9.5% increase) while Scotland saw a smaller increase to 439,000 recipients (a 2.0% increase) in 2009.
Source: UK Housing Review 2009: 231
Rent rebate housing benefit recipients in Great Britain, 1988-2009
This graph shows the number of housing benefit rent rebate recipients in Great Britain between 1988 and 2009 (data for 2008 is not available).
Rent rebates only cover local authority and new town tenants. Rent rebate numbers are an indicator of individuals’ ability to pay for housing. The rebate is an income-related benefit designed to help local authority and new town tenants on low incomes pay for rented accommodation whether in or out of work.
There has been a steady decline in the number of recipients of housing benefit rent rebate during the time period. Record high numbers of recipients were noted in 1988 for England (2,475,000), Wales (161,000) and Scotland (496,000). The lowest number of recipients recorded over the last 20 years was in 2009 with 1,214,000 individuals in England, 80,000 in Wales and 202,000 in Scotland, which is approximately half the 1988 figures.
Source: UK Housing Review 2009: 231
Rent allowance housing benefit recipients in Great Britain, 1988-2009
This graph shows the number of housing benefit rent allowance recipients in Great Britain between 1988 and 2009 (data for 2008 is not available).
Rent allowance recipients include only housing association and private rented sector tenants. Rent allowance recipient numbers are an indicator of individuals’ ability to pay for housing. The allowance is an income-related benefit designed to help housing association and private rented sector tenants on low incomes pay for rented accommodation, whether in or out of work.
The number of recipients of rent allowance has increased dramatically from 1988 to 2009. This number has tripled in all countries during this period of time, with England seeing an increase from 848,000 to 2,501,000 people (195% increase), Wales an increase from 44,000 to 140,000 (218% increase) and Scotland an increase from 77,000 to 237,000 (208% increase).
The increase in recipients of housing benefit rent allowance may be attributable to the increase in rental prices causing affordability problems for people on low incomes, along with the decreased involvement of local authorities in the provision of social housing in line with stock transfer to housing associations during the study period.
Source: UK Housing Review 2009: 231