UK home ownership levels may never recover, expert says

The number of UK homeowners and home insurance policyholders may never fully return to the levels seen before 2008's economic downturn, according to one financial expert, but it's not as dire as it sounds.

Speaking at a conference in York, David Miles, external member of the Bank of England's Monetary Policy Committee, said the fewer people buying their own homes these days come to the table with larger deposits, marking a positive change in the sector.

That being said, Miles noted a significant downturn in the housing market, with transactions cut in half in the years following the recession. Prices have been slashed in the sector as well, as more potential buyers stay in the rental sector.

In the long term, Miles said, this lowered rate of home ownership may not have an adverse effect on the economy.

"I do not believe that the housing market and the mortgage market will get back to where we were in the years leading up to the crisis. I also do not think we should regret that," he said.

Miles suggested that fewer people owning homes could stabilise house prices and deprecate their effect on the national economy.

The economist's statements run against recent actions by the Government, which seeks to boost the number of home owners in the UK by offering to underwrite loans for first-time buyers. Critics suggest this could start another borrowing boom by consumers, in turn destabilising the economy and potentially costing taxpayers millions.

Tue, 06 Dec 2011 00:01:00 GMT