Increasing numbers of Britons now own their home without a mortgage, government figures have revealed.
In 2023/2024, 37 per cent of households owned their homes outright, according to the Department for Work and Pensions’ latest Family Resources Survey.
It is less than the 28 per cent of homes owned with a mortgage, revealing a widening gap between those who own their home outright and those who don’t.
Over the past ten years, the number of people owning outright has risen from 33 per cent to 37 per cent of households.
The percentage of households who were buying and owning with a mortgage decreased in each of the years between 2013/2014 and 2016/2017, from 31 per cent to 28 per cent, but has since fluctuated between 28 per cent and 29 per cent.
Chris Sykes, mortgage technical manager at broker Private Finance, says it comes as no surprise to him that more people are owning their home outright, and he expects the proportion of homes to keep on rising.
Spike: The number of homeowners who don’t have a mortgage is on the rise
He puts this down to cash-rich people taking out mortgages in the years when rates were low, to allow to retain some of their cash for other things.
When rates rose, he says they found these relatively easy to pay off.
Sykes says: ‘There are loads of people out there who only ever wanted a mortgage because rates were low, not because they actually need a mortgage.
‘I imagine the proportion of people owning outright will rise over the next year or so as the last of the sub-2 per cent mortgages finish and people decide what to do.’
Nicholas Mendes, technical manager at broker John Charcol says that the trising number of people owning their homes outright might explain why property prices have not crashed during the turbulence of recent years.
‘With more people owning outright, a larger chunk of households are insulated from the impact of interest rate changes – they’re not exposed to mortgage costs, so the Bank of England’s levers don’t bite as hard,’ said Mendes.
‘It doesn’t mean rates are irrelevant, but it might help explain why parts of the housing market and broader economy are proving more resilient than expected.’
Average mortgage payment revealed
The average mortgage payment in 2023/24 was £175 per week, according to the data.
Londoners saw a particular spike, with a 17 per cent increase in the median mortgage repayment compared to the previous year.
The average repayment in London is £1,291 every four weeks compared to £758 across the UK as a whole.
Households in the North East are paying the least on mortgage repayments at £520every four weeks.
Differences: The data reveals what mortgagors across the country typically pay
As for private renters, the median rent for those in London is £1,443 every four weeks – more than those with a mortgage.
Renters in the capital are paying 11 per cent more in rent than the previous year.
Across the UK as a whole the median rent is £73.
In the majority of regions, median mortgage payments were higher than median private sector rents, but typically with less than a £20 per week difference.
‘The scale of cost increases in London is stark but not entirely surprising,’ said Mendes.
‘You’ve got higher property values to begin with, limited supply, and intense demand, especially from younger professionals and international renters.
‘Add to that the return of students, hybrid workers wanting to stay close to the city, and landlords looking to recoup higher costs – it’s a perfect storm. Other regions haven’t faced that same combination of pressures.’
The percentage of households in the private rented sector has remained broadly around 19 per cent in every year since 2017/18.
The percentage of households in the social rented sector shows a similar picture, remaining broadly around 17 per cent since 2016/17.
‘The idea of a landlord exodus hasn’t really materialised in the numbers,’ added Mendes. ‘The share of households in private renting has been remarkably stable.’
‘That suggests landlords are either weathering the higher costs or passing them on to tenants, which might help explain the continued rent inflation.’
Chris Sykes says the private rental data is quite surprising given all the media headlines about landlords selling up.
However, given that rents have been rising at such a pace in recent years, there still seems to be a demand supply imbalance in the market driving up prices.
‘Maybe more people are sharing,’ he said. ‘For example, where one couple might have rented a three bed you might get two couples.’
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