The absence of affordable housing in the UK is an issue. Although it is difficult to predict the future, there are things the government can do now. The simplest option is to increase the supply of cheap housing. The best estate agents in Tewkesbury offer some solutions to the UK’s housing shortage.
Why is affordable housing so scarce in the UK?
According to Nationwide statistics, the average price of a home in the UK has climbed onwards of 60% in the previous 10 years and has nearly quadrupled in the last 22 years. The main long-term cause is allegedly supply and demand, or more specifically, a lack of housing supply and strong demand.
In addition to supply and demand, the Bank of England’s record-low borrowing rates has contributed to the housing market’s boom. The interest rate has been low for more than ten years. In December 2021, the BoE raised the base rate from its all-time low of 0.1% by a factor of five in reaction to soaring inflation. The interest rate is now 1.75 per cent. For those with a higher down payment, borrowing money to buy a house is still reasonably affordable. In this way, the housing market hasn’t yet been significantly affected. On the other hand, more increases are anticipated through the rest of this year. This will probably have an impact on the property market because it will entail higher mortgage payments. Rising living expenses continue to be the key contributor to the housing market issue in the UK.
Why is affordable housing a necessity in the UK?
Because of the UK’s slowly expanding population, we require additional housing that is both affordable and plentiful. In other words, it involves more than just replacing houses that must be torn down or sold off to the private sector.
Approximately 67 million people called the UK home in 2020, an increase of 284,000 in a single year. This upward trend in population has persisted in the years afterwards. While population growth is now slowing, it has been on the increase for the past two decades.
Additionally contributing to the demand for more affordable homes is climate change. The majority of the UK’s almost 30 million homes are located in coastal regions that are becoming uninhabitable as a result of increasing sea levels. However, some of them are too old, making it more difficult or expensive to refit them with insulation that is more climate-friendly.
Will housing ever again be affordable in the UK?
It is challenging to predict the UK property market’s future, particularly in the long run. Although improbable, a housing catastrophe in 2022 is possible. Due to high demand and a lack of available housing, prices are rising.
Simply put, more reasonably priced homes must be constructed for people to purchase and rent if housing prices are to return to normal in the UK. The Westminster administration has just established a goal of building 300,000 new houses yearly, however, it has not yet accomplished this. Another £11 billion has been set up for the Affordable Housing Programme, with the goal of constructing 180,000 affordable houses over the next five years.
How to address the affordability of property in the UK:
- Build more reasonably priced homes:
In order to alleviate the housing problem in the UK, it is estimated that 145,000 affordable houses must be constructed yearly over the next five years. 90,000 of its total should be social rent, the most affordable homes that housing organisations and councils offer. Local earnings are correlated with rents in this system.
- Renters in need should be assisted:
To help struggling tenants stay in their homes, the government should provide specialised subsidy packages. The allowance was adjusted to meet 30% of rentals since the pandemic began in March 2020.
Unfortunately, the difference between the allowance and the cost of renting has widened as of April 2022. Struggling tenants would be advantaged if the government reconsidered its judgment on LHAs.
- The private rental industry has to become more professional:
To address the growing issue without requiring a large number of evictions, this program would transition to indefinite leases and establish a tenants’ loans scheme.
- Construct more homes where necessary:
More houses need to be constructed in the UK’s high-demand locations, such as cities, as part of a new strategy. New building techniques must also be used, such as producing homes in factories using components like timber frames. This would make it possible to swiftly and inexpensively build more houses of higher quality.