How Close are We to Solving the UK Housing Crisis?
Housing in the UK needs fixing. This is something we’re all aware of.
For some, commitment from the government is meaningless. It’s time for action! So, let’s weigh it all up. How close are we to solving the UK housing crisis?
What caused the housing crisis?
Where did all these problems come from in the first place?
Some believe it’s a disaster of our own making, others feel that it’s a result of circumstances out of our control. It appears we cannot blame the UK housing crash on one factor alone.
Here are some of the main causes:
- Increasing population/ higher life expectancy of said population
- Smaller households (the less people in one house, the more need to be built)
- More property investors, meaning the buy-to-let market has grown
- Local councils building less houses
- Lack of available land
- Sky-high house prices
- Unaffordable rent
Time to dig a little deeper… Here’s the UK housing crisis explained:
Lack of affordable homes
Owner-occupation levels for the young have collapsed because homes have become unaffordable.
In fact, a study showed that the chances of a young adult on a middle income owning a home in the UK have more than halved in the past two decades.
So, sky-high house prices have taken their toll. For many, owning a home is simply not an option.
While renting can get extremely expensive, particularly in London, it can be the cheaper option than tackling all the hidden costs that come alongside buying a house itself, such as removals costs.
Difficulties for first-time buyers
First-time buyers have it rough! Society is largely to blame for this, since it can feel as though there’s a lack of help for first-time buyers out there.
People trying to get a foot on the property ladder cannot get the deposit they need, so are forced to privately rent – in some areas paying more than a third of their household income.
Of course, when it comes to renting or buying, some people choose to rent and there’s nothing wrong with that. The freedom to be able to move when you want, or have no maintenance worries, can be compelling reasons not to buy your own home.
However, for some, renting is a force of circumstance – not a choice. Getting a foothold on the property ladder can feel like an impossible task.
Lack of new houses being built
While house-building has recovered from the lows of the financial recession a decade ago, there’s still a long way to go until the prime minister’s target is hit.
A growing population requires more housing! It seems we’re still unable to keep up, particularly in the densely populated areas, such as London.
It seems straightforward enough – more people need more houses! But, evidently, solving the housing crisis is more difficult than simply building more homes. However, the lack of housing in Britain needs to change.
Social housing shortage
Sky-high house prices, increasing rent and benefit cuts have all contributed to the need for more social housing. However, it simply isn’t available.
The impact of this has been felt all over the country, particularly in the capital.
The London housing crisis
London’s home crisis has been largely blamed on the divide of wealth. Many families are forced to live in temporary housing for extended periods of time, or relocated across the country away from the people they know.
Meanwhile, many properties sit empty and unused, owned by the richer members of society and seen as investments.
So, unsurprisingly, the London housing crisis statistics aren’t looking good. London’s population is currently nearly 9 million, with more than 8,000 of them sleeping rough on the streets in 2016-17.
Imbalances in supply and demand
The current state of UK housing is often blamed on immigration.
However, it appears that it’s population growth in general, not migration on its own.
An imbalance in supply and demand is an all-encompassing term that describes the lack of resources (in this case houses) for those who need them.
But, to solve these housing problems, we need to look for a solution.
Where’s Britain’s housing crisis now?
Things are starting to move – albeit slowly. Housing issues in the UK won’t disappear overnight, but we’re making steps in the right direction.
Let’s focus on the positives:
- The government vowed to help those with smaller deposits in a new backed 95% LTV mortgage scheme
- The Help to Buy: Equity Loan scheme runs until 2023
- Current mortgage interest rates are low
So, while many people may feel their questions are going unanswered, such as, ‘how many houses are being built in the UK?’, the government is making efforts to solve
Is government support for the housing issues working?
To combat the housing crisis in the UK and help people on the property ladder, the government has developed a number of financial support schemes.
But, are they working? Here’s a snapshot …
Help to Buy scheme
This helps first-time buyers buy a new build with only a 5% deposit, and runs until 2023. It appears to have helped many get on the property ladder!
Right to Buy
If you’ve rented your home from the council for a certain period of time, you’re eligible to buy it at a discount.
Conditions apply, of course. You must have lived in your home for three years, however, these don’t need to be consecutive.
Shared ownership
Shared ownership means that you buy a share of a home from your landlord. You then pay a discounted rent on the share you don’t own.
Later down the line, this can be changed, and you can end up owning the property outright by buying a bigger share.
Those earning under 80,000 in the UK (90,000 in London) can apply for shared ownership.
The scheme is an easy way to get on the property ladder, however, it’s not without its problems. The title of ‘shared ownership’ has been called into question by some, as the landlord still holds most of the power. Many see the scheme as simply a normal tenancy agreement with a huge deposit.
As a result, it’s unclear whether this scheme has made any headway in solving the housing issues in the UK.
What’s the solution for the housing crisis in the UK?
When it comes to the housing situation in the UK, the government seem to be between a rock and a hard place. Successive governments have failed to be able to tackle the housing crisis with any great success.
Building houses in everyone’s backyard is a very emotive issue and therefore becomes a crisis seems to be able to handle.
Without new homes being built, property developers and investors move housing stock into the rental market – meaning home ownership might not be achievable to a growing number of people.
Without proper legislation and government intervention to force these targets, it will be hard to see how this will be possible. Therefore, the housing shortage in the UK won’t find a resolution.
Whether you’re looking to buy or rent, find out more about your new area with a property report. A full report contains information on everything from schools to crime stats, telling you everything you need to know.
Last Updated: September 22nd, 2024
