Housing stock, land supply and affordability are all culpable for the depleting number of homeowners in the capital. Rebekah Commane ponders the issues
The UK’s so-called ‘housing crisis’ has become commonplace on national news headlines and is a subject of great debate among industry experts.
A lack of suitable land and a shortage of houses available for purchase are generally highlighted as the main issues facing would-be first time buyers. But some argue that this is myth. In truth there is no one thing to blame but a combination of several factors.
For a start, the argument most-often addresses these issues in terms of the UK as a whole. In reality, the problem is predominantly confined to the bubble that is London and its commuter belt.
Obviously, the capital is where the greatest portion of the population lives and many move there from around the world for jobs and lifestyle purposes. Its appeal is unrivalled by any other UK city.
Meanwhile, there is reportedly an abundance of land to build in some other parts of the country. The trouble is, people don’t want to live there.
If the popularity of London as a place of residence could be replicated elsewhere, the housing crisis would not be so intense in the capital. Of course this is an objective that’s unlikely to be achieved in our generation.
In fact, recent figures from housing and homelessness charity, Shelter, have found that more than half of the so-called ‘generation rent’ have given up all hope of ever owning a home if they stay in the capital.
For Londoners, the challenge of raising a deposit for a home is even more staggering than for the rest of the country’s inhabitants with prices completely out of the reach of most.
Often the level of young people in the private rented sector is used as an argument in housing crisis debates. For example, recent statistics revealed that 45 per cent of 18 to 34 year olds are living in rented accommodation.
However, these figures are surely redundant when arguing about a lack of supply. Surely if all of those people have a home to live-in, and overcrowding is rarely suggested as an issue in individual properties, it is affordability rather than a slow-down in development that has hit first-time buyers the hardest.
On the other hand, one issue naturally leads to the other: as the number of houses being built declines, competition in the market increases, driving up the price of existing property. So while there may be enough houses to live-in at present, if population levels grow as expected, and the slump in development continues, this won’t be the case in 20 years when the number of households in the UK is expected to reach 21.7 million.
At the recent Building Society Association conference in Harrogate, Roger Harding, head of policy at Shelter, said that the country is not necessarily experiencing a housing supply problem, but that property was unevenly distributed.
“It is, at its heart, a political problem”, said Harding.
“People don’t necessarily feel that there’s a housing shortage, but they’re worried that their kids won’t be able to afford to buy.
“The issue would not simply be solved by putting more mortgage credit into the system; it has to be coupled with structural reforms.”
The number of vacant or dilapidated houses on the market is another point for contention.
In 2011 there were found to be 6,000 empty houses in the capital under council ownership alone.
But in London, should these be made available for private ownership, they would no doubt remain out of the reach of many due to inevitably high asking prices.
Rising demand and constrained supply in the housing industry is expected to continue. Renting has become the norm; not through choice but through necessity as prices increase and wages remain static. Climbing Everest seems a more realistic goal for most 18 to 34 year olds than the dizzying heights of saving a sufficient mortgage deposit, without the help of a parent that is.
Loading ...