A recent report by the BBC has cast a very interesting light on the UK housing market and the huge shortage of homes. Politicians continue to talk the talk but very often they fail to walk the walk. As a consequence, the BBC report estimates a shortfall of 1.2 million homes in the UK. On top of this, as the UK population continues to grow so demand for houses is also following suit.
Snippets from the report
Here are a number of snippets from the BBC report which highlight the challenges facing the UK housing market and potential opportunities for investors:-
• It will take 15 years at current building rates to close the housing supply gap
• The housing shortage is affecting the mental health of millions of people
• 25% of those surveyed said their mental health had suffered as a consequence of housing issues
• More than half of 18 to 24-year-olds still live with their parents
• 18% of those aged between 25 and 34 still live with their parents
• Some tenants are spending a third of their monthly income on rent/mortgage payments
The UK government respond to the report by stating that:-
• Since 2010 the government has delivered more than 464,000 new affordable homes
• This includes 114,000 social homes
• The social housing waiting list has fallen by 40% since 2012
As ever, the figures issued by the government do not totally stack up against the experiences of individuals up and down the country. While the government response may well be accurate, have they taken into account housing associations and private landlords? What is the level of rental benefits paid out by the UK government today compared to 10 years ago?
Looking to the future
During the last general election the Conservative party committed to building 1 million homes during this Parliament. The government is also very quick to point out that last year saw the largest number of new homes built over the last 30 years. There is also the lifting of the borrowing cap for local authorities which should increase investment in social housing. However, couples, individuals and families up and down the country need housing now!
It is fair to say that plugging the gap between current supply and current demand has been a huge problem for many governments over the years. When you also consider the recent floods we can only assume this will change the process of obtaining planning permission from local authorities. We know that many homes over the last 20 years or so have been built on land which has the potential to flood. Whether there will be any legal comeback from those who acquired property on “known floodplains” remains to be seen. However, it will not help the planning permission process going forward.
Thinking outside the box
Shared accommodation, different structures and space-saving accommodation will continue to attract huge attention going forward. Even though the UK is pulling out of the European Union the UK population is still growing and will continue to do so. There is a real need to “think outside the box” and look to other countries to see out they have solved their housing crisis. Simply promising to build more and more traditional houses is now lost on the electorate. The government will need to address the issue of specific funding, rather than blasé funding targets announced time and time again, as well as a huge shortage of skilled labour.
While Boris Johnson has his critics, he has started his new tenure as prime minister in a very positive and forward thinking fashion. However, he will need much more of the same if he is to maintain the confidence of the UK population going forward.