Nearly eight out of 10 families across England are unable to afford newly built homes in their local area, a report by housing charity Shelter says.
This story was published in early March 2017 in most of the news media and shortly before the forthcoming Budget Speech.
The links to the BBC and ITV articles are as follows:
(they open in a new tab)
affordable houses too expensive: BBC Shelter story.
affordable houses too expensive: ITV Shelter story.
It finds rising rising house prices hitting all parts of the country, not just London and the south-east.
Apparently, ministers agree the present system for building more affordable houses is broken and still aim to make such housing genuinely affordable.
There are allegations that prices for land, plus the cost of construction, have risen to allow maximum profits to be taken by builders and at the same time housing supply is not being accelerated to meet predicted housing demand.
Many new-build houses are costing over £200,000 and more than half of the families in each region simply cannot afford to pay this.
In addition, second-hand houses for sale are generally cheaper in price.
Shelter says there is a crisis in the housing sector.
The article argues for more local authority involvement enabling the building of properly affordable houses as well as the possibility of involvement by voluntary organisations that may be encouraged to work to build such homes for the public good rather than for increased private profits.
The charity would like to see a “new civic housebuilding” system introduced to facilitate the building of new, affordable high quality houses, with greater powers for local authorities over land acquisition in their respective areas.
Under Shelter’s proposed initiative, landowners could choose to sell at reasonable prices, or invest their land as equity and own shares in a development, instead taking long-term returns and a share of the profit.
A Department for Communities and Local Government spokesman was interviewed about this and apparently agreed with Shelter that the housing market in this country is broken but also confirmed, among other things, that the industry is committed to delivering further increases in supply with more of the types and sizes of houses that can better match supply to demand.
It will be interesting to see what is offered to help with this in the forthcoming Spring 2017 Budget.
As a final comment, my own proposal is for a new way for housing in England and Wales to be marketed which is based on changing from vendor-centric estate agencies to buyer-oriented ones. The details are fully set out in ‘The Hendry Solution’. The change would not cost a great deal to implement and would bring massive benefits to every local housing marketplace, by helping to satisfy demand at more favourable prices. It would be achieved by making the process of buying and selling itself considerably more efficient and less costly, whilst still encouraging builders to construct the houses which are of course urgently needed.
To read more about The Hendry Solution go to the following link:
Improve The Housing Market in England and Wales.
How to Improve the Housing Market in England and Wales.
Peter Hendry, Consultant in Housing Valuation