If we genuinely want to solve the crisis, we first have to realise this and work out why some areas aren’t suffering as much as others. Is it population? Is it income levels? Is it economic growth? Lack of building? A combination? But we really need to know what drives the crisis and in turn this will help us put right the problems that are causing a housing crisis in certain areas and know the triggers and turning points.
The latest English Housing Survey shows that of the population as a whole, “Overall, 14.3 million were owner occupiers, of which 33% (7.4 million) owned outright”. In other words, they’ve no mortgage or interest rate change worries. Their fears are about just being able to afford to heat and maintain the home they live in.
For many in the private rented sector (PRS), they enjoy the freedom and lack of hassle of renting properties, if they want and can afford to be in this sector. Owning a home isn’t for everyone. This group can include students, people from abroad working in the UK, divorcees establishing a new life, people with poor credit ratings, and those who have jobs which shift them around from one area to another, such as retail managers.
Those typically unhappy in the PRS are people who are having to rent because they can’t afford to buy, or want to be in social housing instead, which costs half the price. People in these categories aren’t ever going to feel “happy” in the PRS.
Finally, for those who have access to social housing, life can be affordable and happy. But getting into social housing is virtually impossible these days and for those already in it, there are constant worries about changes to rules surrounding their housing tenure. Examples include benefit caps, and the current move to Universal Credit, coupled with the problems created from the ‘bedroom tax’.
In addition to some people doing just fine in housing, there are some regions which have serious issues and some which have very few of them. For example, I live near Nottingham and although we do have some concerns, it’s one of the cheapest cities to live in. Finding two-bed terraces for £60,000 is not impossible and the city centre’s average house price, according to the Land Registry, is just over £89,000, so there are plenty of homes sold for less and some for more. From a rental perspective, according to the Belvoir Lettings Index, rents are currently no higher than they were at the market peak in September 2008; renting today costs on average £547 per month (2014 figures) versus around £550 per month at the start of the index in March 2008.
So our ‘housing crisis’ is due to people being forced into a tenure they don’t want to be in and/or living in an area where house prices and rents have moved beyond the average person’s wages. Areas like this include London, parts of the Home Counties and then as far out from London as Oxford, Cambridge, Bristol, Edinburgh and little ‘hotspots’ like Harrogate.
Effectively, what we really have is a social housing and affordability crisis – which is very different to a ‘housing crisis’ affecting everyone.
To me, we have no excuses to not solving the crisis. For once all political parties recognise that economic growth will be halted in the UK if we don’t build more homes - albeit taking 30 years for them to realise this. Many now also appreciate the huge contribution the property industry adds to our economy – with new builds generating over £2.80 for every £1 spent. And with backlogs of over a million homes to build versus population growth, that’s a lot of extra economic growth, most of which, when invested, puts the money back in their local economy.
The trick now for MPs, planners and local authorities is to establish local leaders who are determined and believe that their local housing crisis can be solved. In the industry, we know we have the money and the people who are willing to invest it, both from the UK and abroad; we have great industry experts now who are willing to work together and we have a young workforce that is desperate for well-paid jobs and apprenticeships.
What we now need is to identify the land available to build on, and for those local leaders to get the right people round a table to reduce council waiting lists and build affordable homes - rather than homes seen as investment in expensive areas, which are then left empty!
For more information on latest stats and reports, and any information you need on residential property but can’t find for your strategy or presentation, please visit www.designsonproperty.co.uk. We will be happy to help.
