The state of the UK housing market

Housing crisis. Credit - Wikimedia Commons Mtaylor848

It’s no secret that we are in the depth of a full blown housing crisis, with a lack of affordable housing and a strange national obsession with property ownership. The divide between the wealthiest and the most vulnerable in our society is growing rapidly.

The extent to what is actually wrong with the UK’s housing market can be quite hard to understand, so here is a breakdown of the key factors and what it means for individuals trying to get a home.

The cost of property is rising.
The cost of property is rising.

Property value is increasing.

Housing has long been seen as a safe investment in the UK. This trend is ever increasing as factors such as depleting pension pots mean people need to look for new ways to sustain themselves as they grow older. The problem here is that as demand for housing increases, there has been a fall in availability of housing, with the number of new housing built still trying to recover from the 2008 economic downturn. As a result of fewer available houses, the ones that are available soar in price, as developers know that they can charge more. As a rule, as house prices increase, so do rent prices, so individuals are left with little choice but to pay these rates. Nothing can stop demand as people need homes. The higher cost of housing means that younger people, first time buyers and lower income families can’t afford to buy. This has resulted in individuals staying in the family home for longer whilst they try to save up enough to break into the market, according to recent statistics from Halifax, the average age of first time buyers is now thirty years old.

Welfare cuts make it harder for those on the breadline.
Welfare cuts make it harder for those on the breadline.

Welfare cuts.

Spending on welfare is decreasing as the government continue to try and ‘balance the books.’ The government believe that the market will provide for the nation, yet if individuals can’t afford to get on the property ladder, they are left in a position where there is less support from the state. This is causing a widening of the gap between the rich and the poor. Buy-to-let mortgages offer some people the chance to break into the housing market, but if you don’t have a good enough credit rating, again you are left in limbo.

Spending more money on housing means less disposable income for families.
Spending more money on housing means less disposable income for families.

Lower quality of life.

With families only options being to pay excessive rates or find themselves homeless, most tend to have no option other than to deal with it. According to an analysis by The Guardian, house prices are now on average almost six times that of household income. This means that after budgeting for their home, people are left with a lot less disposable income. People are struggling to pay back the excessive mortgages that they took out in order to afford their home, which can result in further costs and even house repossession. According to the Council of Mortgage Lenders, 2014 saw a record six year low in the number of repossessions, with 21,000 households having their home taken away from them, although the CML warned this was set to increase in 2015. Meanwhile according to the Ministry of Justice, renters suffered the most, with 42,728 tenants being evicted.

The waiting list for social housing is now over one million people long.
The waiting list for social housing is now over one million people long.

Enormous waiting lists.

The cost of building more social housing is no small figure, less and less being built and therefore those who are currently in social housing are remaining there. This has resulted in a huge queue of people waiting to get into social housing. The social housing in a lot of areas is locked down. According to the most recent government statistics, as of 2015 there were a total of 1,240,855 households on the waiting list for housing.

I spoke to Olly Alock, the Housing Options Accommodation Services Manager for Bristol City Council. I asked him why more social housing isn’t being built. It goes without saying that all views expressed are his own and not that of his employer: “Social housing needs to be invested in, it needs to be subsidised. Once you’ve bought the land to build decent quality homes, you need the money to buy the land and build the property to then rent it out. You need a lot of money upfront. I don’t know if the current government will invest significantly in this.”

Olly believes that not enough pressure is put on the government to encourage this investment: “I think something significant and radical would have to take place for the government to invest in that way.”

The need for social housing has long been recognised. Following the end of the first world war in 1919, huge council housing schemes were set up and Britain did see a rise in affordable homes. However one could argue this development was damaged with the introduction of the right-to-buy scheme in 1982, where council house tenants were given the option to buy their homes. As the homes were made private, not enough new ones were built, demand increased whilst supply depleted.

As is often the case, the poorest and most vulnerable of our society suffer. Those who can not afford to buy property amidst our country’s house owning obsession. Olly uses the metaphor: “When the tides in and you can’t see the beach, it all looks lovely. Underneath the beach you can have a lot of casualties,” “I think the casualties of the housing market are the households who are unable to afford properties, and are now stuck because their access to affordable housing is very limited.” He adds.

The bottom line.

  • The increasing cost of housing, as property ownership continues to be highly desirable.
  • The difficulty for first time buyers to break into the housing market.
  • The lack of new social housing being built due to extensive costs and planning it requires.
  • The welfare cuts taking place which puts a further pinch on the most vulnerable.

If all this is getting you panicked, well, that’s probably a good thing. It’s good to be worried, it stops us from becoming complacent. But don’t be disillusioned, there are alternatives out there, and hopefully after seeing some examples of these here on this site, you might just be able to put control back in your own hands.


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