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Owner-occupier rates set to fall, says RICS

Home ownership rates are set to fall in the UK, US and Spain, according to research from the Royal Institution of Chartered Surveyors.

In the UK, the owner-occupier rate has fallen by 3 per cent to 68 per cent since hitting its peak in 2003.

The drop in the US has been more modest, falling 2 per cent from its peak of 69 per cent in 2004. Spain has suffered the largest drop in home ownership rates, with the current rate 10 per cent below the peak of 92 per cent achieved in 2002.

Despite the drop in house prices, RICS believes the combination of tight lending constraints and an uncertain economic environment points to a further shift in tenure in the UK over the next few years, with owner-occupier rates continuing to edge lower.

RICS economist Himanshu Wani says: “The downward trend in owner-occupier rates that started in the middle of the last decade looks set to continue. With first-time buyers struggling to take an initial tentative step on housing ladder partly because of lenders demands for larger deposits, more potential purchasers are likely to choose the rental option, and delay buying a property until they are in a stronger financial position to do so. Indeed, the latest RICS UK lettings survey shows tenant demand continues to increase and that this is now feeding through into rising rents.”

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