9:11 AM, 19th November 2011, About 10 years ago 3
With people living longer and with less people per household, it is pretty obvious that more housing is needed. But that’s just the tip of the iceberg.
The Office of National statistics has predicted that the UK population will grow to 71.6 million by the year 2033.
But where will they all live?
Speaking with the experience of being a private landlord since 1989 and having been the MD of one of the UK’s largest mortgage brokerages I regularly get involved in debates about availability of mortgage finance, rising rents and rogue landlords. However, these are just symptoms of a much larger problem.
To accommodate this growth we need to build enough houses to create a City the size of Birmingham!
The Private Rented Sector is under pressure to grow to accommodate the problem and mortgage lenders are under pressure to lend. If we waved a magic wand and made those things happen, the only thing that would change is house prices. They would increase while demand would remain a problem.
We can’t create more land but the red tape could be cut to make more land available for development. Would the builders build though if only the lucky few could raise finance to purchase the properties? Also, if the balance between supply and demand for housing was altered significantly without the ability and incentive for newly built properties to be purchased, that could further destabilise the housing market.
In my city (Norwich) huge developments have been mothballed for up to three years. I have heard similar stories across the UK. What is the Government doing to incentivise builders to complete these developments? What is being done to incentivise home ownership or the expansion of Private Rented Sector? We all know the answer to that one, that’s why NOTHING is happening.
My conclusion, therefore, is there needs to be a fine balance of release of land, incentives to develop and ability to purchase. The result of getting the balance wrong will result in either a massive property price boom or a crash in property values and huge increases in rents and homelessness. Campaigns to deal with rogue landlords will continue to be futile unless the balance between supply and demand is equal. Unless more housing is developed, choice of housing will become even more scarce. Everybody deserves safe housing, increasing supply is the only way to provide people with choice.
This is my opinion though, what’s yours?
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Mark and his family have been investing in property since 1989, initially in the Norwich area but more recently across the length and breadth of England. Mark created Property118.com as a social network for landlords with a vision of becoming the UK’s largest online property investor directory.
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