More people now own their home outright than have a mortgage, it emerged last night.
A third of households in England– some 7.4million families– now own their home mortgage-free, compared to 6.9million who have a loan.
This is the first time debt-free households have overtaken those with mortgages since records began in 1981.
Some 7.4 million buyers in England now own their home outright compared to 6.9 million who are paying off a mortgage, the first time debt-free households have topped those with loans
But home ownerships overall have plummeted to the lowest level in 30 years and campaigners warn soaring house prices have put owning a home out of reach for many.
In 2013-14, some 33 per cent of households owned their home mortgage-free while 31 per cent were paying off a loan, according to the English Housing Survey.
It is a dramatic change from 2000, when 28 per cent owned outright and 42 per cent had a mortgage.
The change is partly due to record low interest rates that have allowed many to pay off their mortgages quicker than expected.
An ageing population has also contributed, as baby boomers who bought when property was cheaper now find themselves debt-free in retirement.
But the drop in the number of people with mortgages is also driven by soaring house prices, which have made home ownership too expensive for many, forcing them to rent for longer.
The survey revealed that just 63 per cent of households now own their homes, with or without a mortgage– the lowest rate since 1985.
This is the 11th year in a row home ownership has declined. The younger generation has been hardest hit, with just a third of those aged 25 to 34 having a mortgage, compared to more than half ten years ago.
The growing cost of owning a home has also been reflected in Bank of England figures on debt. At the end of 2014, UK households owed £1.26trillion in outstanding mortgage debt– more than double the £550billion owed in 2000.
Campaigners said the English Housing Survey figures revealed a disturbing generation gap was opening up, with fewer young Britons able to obtain a mortgage.
Campbell Robb, chief executive of the charity Shelter, said: ’These figures confirm what millions of people across the country are already feeling: a home of their own has become a distant dream, no matter how hard they work or save.
’The shortage of affordable homes is leaving young adults with no choice but to remain stuck in their childhood bedrooms, or face decades paying out dead money to landlords. This can’t go on.’
David Orr, of the National Housing Federation, said: ’The fact that the number of people owning with a mortgage is falling is a clear sign that it’s becoming more and more difficult to get a foot on the housing ladder.
’Priced out of the housing market, young people are stuck in a cycle of private renting at an ever escalating cost that drains them of any spare money they could have saved for a deposit.
’As house prices continue to rise we’re in danger of winding back the clock on home ownership, with only the privileged few having any hope of affording it.’
Estate agents Savills warned that the levels of home ownership will continue to slide due to higher interest rates, greater mortgage regulation and an acute housing shortage.
House building across England remains at its lowest peacetime level since the 1920s, pushing up property prices further.
The Government has tried to increase home ownership through its Help to Buy scheme, which offers people lower deposits.
Housing minister Brandon Lewis said: ’Thanks to Government-backed schemes, nearly 192,000 people have bought or reserved a new home, and thanks to our efforts to keep interest rates at their record low we’ve helped keep mortgages more affordable.’