Why is UK Homeownership Difficult for Ethnic Minorities?

Census data from Positive Money has revealed that ethnic minorities are disproportionately affected by declining homeownership rates and high rates of overcrowding.

Since 2001, ethnic minority households have been around a quarter less likely than the national average to be homeowners.

National homeownership rates have decreased by 6.3% during this time.

Within this rate, there is an 8.5% decline in ethnic minority households as opposed to a 3.1% decline in White British households.

An increasing percentage of ethnic minority households in the population, who are still prevented from purchasing homes and consequently have a chronically low homeownership rate, contributed to the 1.8% decline in national homeownership between 2011 and 2021.

Black African (1.3%), Black Caribbean (3.9%), Pakistani (3.3%), and Bangladeshi (3.3%) households have all seen genuine declines in their average homeownership rates.

The average homeownership rate has remained the same or increased for all other groups.

In contrast, just a small improvement from the 15% incidence of overcrowding in 2011 is shown in the 14% of ethnic minority families that are still too small.

This is substantially worse for some people and 3.5 times the national average for overcrowding (4%): Compared to 2011, 28% of Bangladeshi families, 21% of Black African households, and 21% of Pakistani households are now overcrowded.

For residents of London’s ethnic minorities, the situation is significantly worse.

Over the past 20 years, homeownership rates have decreased by almost 10% among households in London that are Mixed White/Black Caribbean, Indian, Pakistani, and Black Caribbean, which were already less likely to own their homes than other groups in 2001.

This decrease is higher than that of other ethnic minority households across the nation (4-7%), as well as that of White British Londoners (2.5%).

Less than 25% of mixed-race, mixed-race Caribbean and black African households in London currently own their property.

The study demonstrates how the housing problem in the UK has disproportionately impacted Black, Asian, and ethnic minority groups over the past 20 years due to the lack of progress being made.

It also shows that this is likely to persist over time as younger people from ethnic minorities continue to have much lower house ownership rates than people of similar age.

In 2021, 28% of Black people aged 35 to 49 owned their own homes, compared to an average of 61% of census respondents in this age group today.

In all age groups, there are typically 10-20% fewer mixed-race and Arab homeowners than the national average.

Positive Money’s Housing Policy Lead, Martha Dillon, said:

“Our findings confirm that the housing crisis is of an order of magnitude more extreme for Black, Asian and ethnic minority communities in England and Wales.

“The government and opposition claim to want to bring homeownership rates up, yet do not acknowledge that falling homeownership rates and unacceptable living conditions have been concentrated among Black and Bangladeshi households.

“The situation for ethnic minorities starkly illustrates that the transformation of our homes into vehicles for accumulating wealth over the last decades has created a two-tier housing system.

“On the one hand, an expensive system of homeownership; on the other, a precarious, unaffordable and dangerous rental sector, that the majority of Black, Bangladeshi, Mixed Race, Arab, Roma and Traveller households have little option but to live in.

“We urgently need to tackle the inequalities in our housing system, but this needs more than efforts to make mortgages easier to access.”

“We need serious long-term plans from policymakers that halt the invasion of our homes by financial interests, grow the social housing stock and protect people from poor quality, unaffordable and overcrowded homes.”