PRimage had just been reading a new report released today on the crisis in the UK housing market – which forecasts that home ownership in England will slump to just 63.8% over the next decade. The National Housing Federation report also forecasts steep rises in the private rental sector and a house price boom. It blames the bleak outlook on an under-supply of homes in the UK.
So, for the UK it looks like we are heading for a ‘generation-rent’ scenario! And market trends will follow those in the US. Certainly many young people now face decades of renting!
PRimage believes the NHF are right to highlight stark statistics which show that last year, the number of new homes built reached the lowest in peacetime since 1923 – and correct in blaming declining home ownership on banks setting too lenient lending criteria and too small deposits. The Government needs to take immediate action to tackle this crisis and the chronically low supply of homes. From what Judy Viitanen understands, reading the report and comments from industry experts, the difficulties of raising deposits and obtaining mortgages are one side of the problem. The other is housing supply. It is, though, a bit of a catch-22. The major developers say they are willing and ready to build more homes. But they worry that they won’t be able to sell them, because potential buyers will not be able to raise the finance. The dilemma for policy makers is how to escape this damaging cycle, of restricted supply leading to high prices, which leads to curtailed demand, resulting in unwillingness to build
- In England, the proportion of people living in owner-occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.
- In London, the majority of people will rent by 2021, with the number of owner-occupiers falling from 51.6% in 2010 to 44% by 2021
- Average rents for apartments and single family homes in the private sector are forecast to increase by 19.8% over the next five years, fuelled by high demand and a shortage of properties.