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 across the news media and shortly before the forthcoming Budget Speech. Little has changes since.
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.
These reports find 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 truly affordable houses is broken yet they still aim to make such housing genuinely affordable.
There is clear evidence that prices for land, as well as the cost of construction have been rising. This allows maximum profits to be taken by builders and land owners combined but housing supply is unable to be accelerated sufficiently to meet the apparent housing demand as a result of such baked in price increases. This is not good enough.
Many new-build houses are now costing over £250,000 and more than half of the families in each region simply cannot afford to pay this. At the same time, second-hand houses for sale are becoming increasingly cheaper in price. Shelter has been saying there is a crisis in the new housing sector for a considerable while.
A Department for Communities and Local Government spokesman was interviewed about this at the time that Shelter’s report was published and apparently they agreed with Shelter that the housing market in this country is broken and 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. We are still waiting.
The charity, on the other hand, would like to see a “new civic housebuilding” system introduced to facilitate the building of new, but affordable high quality houses, with greater powers given to local authorities over land acquisition in their respective areas. However, The House Price Virtuoso Solution, described below, is a rather different way to remedy the ongoing prices dilemma.
Its proposal is a way for all housing across England, Wales and hopefully Scotland if Holyrood should agree, to be marketed differently, by changing from vendor-centric estate agencies to buyer-oriented ones.
As a preface to reading the new proposals in detail, I should explain they are primarily designed to restore house price affordability and to overcome the present crisis of lack of affordability by improving the efficiency of the marketing methods currently in use. The proposals are above politics and should be applied irrespective of political considerations.
Should such a remedy not be applied soon this will not only disadvantage the political party that ignores these issues but it will also disadvantage the nation as it works to recover its economic stability following leaving the European Union after the 40 or so years of being a member.
In addition to this quite obviously, from recent analysis, centralised decision-making is simply not and cannot be sufficient to cope with the magnitude of both planning for increased residential development and the correct marketing of the residential property requiring to be bought and sold at significant pace in challenging market situations.
We owe it to this our country not to miss the opportunity to turn our housing economy into amongst the most efficient, most fair, and most competitive one anywhere in the western world.
The change would not cost a great deal to implement but would bring massive benefits to every local housing marketplace, by helping to satisfy demand at more favourable prices. It can be achieved by making the actual process of buying and selling considerably more efficient and less costly, whilst still encouraging builders to construct the houses which are undeniably still needed.
Achieving this would massively assist the journey of our economy back towards becoming a top trading economy, fit for purpose and fit to provide those who live and work here with the security of having quality housing at prices which are always genuinely affordable for them. This proposal is nothing short of being an essential requirement in our process of re-discovery.
To read more about The House Price Virtuoso Solution please go to the following link:
How to Improve the Housing Market in England and Wales.
Posted by: Peter Hendry, Housing Valuation Consultant
Author:– The House Price Virtuoso Solution