How many Wigston homeowners have paid their mortgage off?

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The Government’s Annual Housing Survey is 50 years old this year.  It has taken a snapshot of the UK property market every year since 1969 and in the recently published report for 2018, it wasn’t a surprise to see that owner-occupation is still the most predominant tenure. Yet now, more people own their home without a mortgage than with, as the number of people buying their first home (obviously with a mortgage) has been in decline since the Millennium.  The report also shows homeowners (mortgaged and owned outright) are, on average, older than renters and between the homeowners themselves, those who are mortgage-free are older than those with a mortgage.

Looking at the most recent data for Oadby and Wigston, I wanted to see how we compared to the national picture. Therefore, focusing on the four main tenures of owned outright, owned with a mortgage, social housing (i.e. Council Housing and Housing Association) and private rented, this is what I found out…

Oadby and Wigston – Tenure by Age
Age Owned Outright Owned with Mortgage Social Housing Private Rented
Age 24 & Under 4.3% 17.3% 24.6% 53.9%
Age 25 to 34 4.8% 55.8% 10.1% 29.3%
Age 35 to 49 12.8% 66.4% 7.3% 13.5%
Age 50 to 64 44.7% 43.8% 5.3% 6.2%
Age 65 to 74 79.8% 8.8% 6.8% 4.5%
Age 75 + 80.9% 5.3% 9.1% 4.7%

 

Looking at the stats, you can see that homeownership in the Wigston and Oadby area as a whole (both owned and owned with a mortgage combined) is lower in the 25yo to 34yo age range compared to 35yo to 49yo, yet roll the clock back to the 1980s and the opposite was the case.

So how many local homeowners have paid off their mortgage?

52.1% of Oadby and Wigston homeowners are mortgage-free, yet of the 5,389 households that are owned by 50yo to 64yo in the Oadby and Wigston area, 49.5% of those people still have a mortgage.

As most people bought their first house in their early to mid-20s back in the 1980s, this shows that a lot of Oadby and Wigston people must have re-mortgaged in the past and extended their borrowings (otherwise they should have paid off their mortgage by now).

The other thing that concerns me is the 5.3% of the Oadby and Wigston over 75yo homeowners who have a mortgage.

If you amalgamate the national historic ranges going back to 1977 (see the graph below “UK Households with a Mortgage by Age – 1977 to 2018” and note the age bands are slightly different to the recent local stats, because they were carried out under different government departments), you will see the number of people who own a property with a mortgage has been dropping since the Millennium, yet nationally the number of people who own a property has remained roughly the same, even with the growth of the private rented sector.

Reports in the industry suggest that in the next ten years that will increase, as nearly 1 in 5 homeowners will still be paying off their mortgage after retirement. One of the reasons for this will be the legacy of interest-only loans and delayed first-time buying as we become more and more like Germany in our house ownership models, where people tend to rent their homes until their 50s and then buy when they inherit money from their parents.

In the meantime, demand for Wigston rental properties will only increase… so good news for Wigston buy-to-let landlords and, indirectly, Wigston homeowners as well.