Home ownership issues


The majority of households in England own their own home and about half of them own it with a mortgage.

House prices

As house prices increased dramatically over the last decade, so did the numbers of borrowers who took out risky mortgage loans that stretched them to their financial limits. At the same time, growing numbers of people found themselves priced out of buying altogether.

Levels of home ownership have been falling since 2003. Now house prices have fallen in many areas, some owners are exposed to 'negative equity'. But overall, the sky-high cost of housing and a drying up of mortgage finance means that first time buyers are still unable to buy.

Our video explains how risky mortgage lending helped to fuel the house price boom – and what some of the consequences have been. 


Better regulation of the mortgage market is desperately needed if we are to prevent this situation from happening again in the future. Read more about responsible lending.

Issues with home ownership

The current affordability crisis

The most conspicuous problem with the UK property market in recent times has been spiralling house prices, which have sparked a situation where many people cannot afford to buy. Even now that prices have fallen slightly, home ownership is still out of reach for many thousands of households. House prices have risen much more sharply than wages a particular problem for first time buyers.


Source: DCLG Live

There are many reasons why house prices rose so rapidly. Simply put there aren't enough homes to go round and when demand outstrips reply, prices rise.

Other factors like smaller households, the popularity of buy-to-let as an investment, and second-home ownership all contributed to a situation where more and more people were competing to buy a relatively small number of properties, fuelled until recently by easy mortgage availability.

If the underlying problem of the shortage of housing is not addressed, this cycle of boom and bust is destined to repeat itself.

The risk of home repossession

Even if you can get on the ladder, you're still not guaranteed to be in a secure position.

Many people were given mortgage loans many times their annual salary. This resulted in hefty repayments that stretched households to the limits of what they could afford. In these circumstances, there is a big risk of borrowers being unable to meet future repayments. This in turn raises the threat of a home being repossessed when borrowers are unable to remedy the situation, potentially leading to homelessness for that individual and all their dependants.

Following campaigns by Shelter and other organisations, the last Government introduced a range of safety nets to help struggling homeowners.

We work closely with Government, industry, and other advice agencies to make these initiatives work and we continue to monitor their effectiveness carefully.

Find out more about safety nets for homeowners.

Successful Shelter campaigns have also lead to the regulation of the sale and rent back market, better regulation of arrears management by the FSA, new laws to protect tenants when their lender defaults and the introduction of a pre-action protocol requiring lenders to take certain steps before taking a borrower to court to pursue repossession.

A huge amount has been achieved, but while historically low interest rates and better mortgage safety nets have prevented the scale of repossessions from being as severe as some predictions, the outlook remains bleak.

 It is likely that arrears and repossessions will remain high while economic uncertainty continues. Our research has shown the desperate measures that families are taking to stay on top of their debts.

Some schemes to help homeowners have already been scaled back as a result of public spending cuts, and lenders and government must continue to find ways to help struggling borrowers.

Improving mortgage safety nets

Shelter believes the safety nets and advice available to home owners need to be improved so that people are helped to keep their home and avoid homelessness.

We welcome the Government-backed mortgage safety nets, which we believe have played a significant role in preventing repossessions from spiralling out of control. To keep struggling homeowners from losing their home, we believe that the Government should remain committed to providing these mortgage safety nets.

The Government’s recent cuts to Support Mortgage Interest (SMI) payments have led to many struggling homeowners being left short and unable to make interest payments on their mortgage, thereby increasing the risk of individuals and families losing their home. Shelter believes that SMI should be paid at the rate of interest charged by lenders and not at the current arbitrary rate, which doesn’t account for the high interest rates that many struggling borrowers have to meet.

Lenders must treat borrowers who can’t afford to keep up with their mortgages fairly. Sadly for some borrowers, home-ownership just isn’t sustainable any more. Instead of repossessing through the courts, we’d like to see more lenders offering Assisted Voluntary Sale schemes and helping borrowers to sell.

How to address these issues

We believe that if the Government wants to increase the number of  people who own their homes, then it is essential to ensure that home ownership is sustainable, that lending is affordable, and that struggling homeowners have good access to safety nets and free, impartial advice, so that people are helped to keep their homes and avoid homelessness.

Shelter believes it is not acceptable for individuals and families alone to bear the brunt of unexpected shifts in the economy or shoulder the risks inherent in a persistently volatile housing market.


Is buying a home out of reach?

Why today’s announcement on housing must be followed by more action: the latest infographic from Shelter.

Interest rates explained

Given the current climate of rising repossessions, Shelter believes that advice and support for home buyers needs to be urgently improved to ensure that homes are not put at risk through unsustainable borrowing.

Promoting more responsible lending

With increasingly indebted households struggling to make ends meet, there has been a sharp rise in the number of home repossessions since 2004. It is critical that mortgage lending practices be made more responsible to ensure households don't take on unacceptable risks to their home.

Improving advice and protection

Given the current climate of rising repossessions, Shelter believes that advice and support for home buyers needs to be urgently improved to ensure that homes are not put at risk through unsustainable borrowing.

Low cost home ownership schemes

In response to the affordability crisis, the government has introduced several Low Cost Home Ownership schemes to allow more people to get on the property ladder.

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