UK housing shortage to get worse in 2015?

  • 10 years ago
  • Uncategorized
The UK housing shortage may get worse in 2015, estate agents warn.
The country’s lack of supply to meet demand has become the biggest obstacle facing the UK property market, driving up house prices and leaving many turning to the private rented sector for long-term accommodation. Indeed, homeownership in Britain is now forecast to fall below France, where renting is the norm, with 64.6 per cent of Brits owning their own home – down from 70 per cent in 2005.
Indeed, research from Genworth published this week revealed that more than six babies have been born in England for every new home built since 2010. 
With England’s birth rate having reached a 41-year high in 2012, the struggles of the construction industry mean for every new home built since the last election, twice as many children (6.1) have been born than during the 1950s (2.9), 1960s (2.7) and 1970s (2.4).
The government has taken major steps to encourage construction in recent years, from Help to Buy lending designed to drive up demand from first time buyers for new build homes, to a wave of other funding schemes and planning changes. Last month, Housing Minister Brandon Lewis announced the second round of funding via the housing revenue account (HRA) borrowing programme, which means 21 councils will be able to additionally borrow almost £100 million over the next 2 years to deliver more than 1,300 new affordable homes and support local growth.
It comes only a matter of months after 22 councils received approval to borrow £122 million to build more than 1,700 affordable homes in their areas. This takes the total to £222 million government investment to deliver over 3,000 affordable homes.
Despite such measures, though, members of the National Association of Estate Agents do not believe this will be enough to meet demand next year.
Almost half (46 per cent) of NAEA agents think that demand for property will increase in 2015, while members were split on whether the same could be said for housing supply. Worrying one in five agents (21 per cent) think levels of stock will decrease next year and third (33 per cent) expect them to stay the same – which, combined with a rise in demand, will mean a heightened housing shortage. 
However, a third (33 per cent) of agents were much more optimistic, stating that housing supply would increase next year – although that will still not enough to meet the rising level of demand. 
When asked what events in 2015 will have the biggest impact on the housing market, the top three greatest influences were base rate rise (34 per cent), changes to stamp duty (32 per cent), and the General Election (32 per cent). 
Indeed, housing is set to become a central topic of debate in the upcoming election.
Mark Hayward, managing director of National Association of Estate Agents, comments: “With agents predicting the housing shortage crisis to potentially worsen in 2015, the General Election will be a pivotal event for the housing market next year, with all three main parties pledging to build more homes should they be elected.”
“We have already seen the current Government put policies in place in an attempt to tackle the problem, with the announcement of new garden city developments, as well as the reforms to stamp duty – another change our members believe will influence the market next year. While we do see these changes as a step in the right direction and believe that stamp duty reform will allow for greater supply in the market by encouraging more people to buy and sell, these changes are still not enough.”
The gap between supply and demand probably won’t close “for some time”, concludes Hayward.

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