House building in the United Kingdom has slumped to a 90-year low. Home ownership is predicted to slump to approximately 65%. The proportion of people living in owner-occupied homes is forecast to fall to 63.8% by 2021, down from 72.5% in 2001 and from the mid-eighties high of 74%.
According to economists, house prices are set to soar by 21.3 per cent over the next five years whilst rents are set to rise by up to 20%.
In some parts of the United Kingdom, 16% of home owners owe more on their mortgage than their property is worth.
Housing minister Grant Shapps said: “The trebling of house prices in the 10 years from 1997 has locked too many out of owning their own home.
“I want to see a period of house price stability so that more homes become affordable, but I am also determined that we pull out all the stops to give hard-working first-time buyers the help they need.
“That’s why I’ve held summits with lenders to encourage them to do more to help people take their first step onto the housing ladder, and I’ve launched the First Buy Scheme as a valuable alternative to the Bank of Mum and Dad for those struggling to get together that much-needed deposit.
“But we also need to get Britain building again. That’s why I’ve announced plans to release thousands of acres of public land for housebuilding.
“Despite the need to tackle the deficit we inherited, this government is putting £4.5bn towards an affordable homes programme which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years.”
Phrases from Mr Shapps such as: “I Want to see”, “Pull out all the stops”, “The help they need”, “We need to get Britain building”, “Announced plans”, “Set to exceed” all indicate well-meant sentiments – a “politician’s intent”. Even the “170,000 homes over the next four years” is preceded by the phrase “set to exceed” and not “WILL exceed”.
Incidentally, the ONLY thing that Mr Shapps promises to exceed are his own expectations – which have not yet been delivered anyway.
Yes, there is a shortage of housing but the ROOT CAUSE of this dire situation is not being treated.
Once again, I shall put it in plain English: The reason why the housing market is in a moribund state is because the banks are NOT lending money to building companies and they are NOT lending money to first time buyers – who incidentally are becoming a near-extinct species.
Mr Shapps may well have held “summits with lenders” but he has not yet given us any indication of any positive outcomes. Meetings do NOT solve issues – only outcomes. So, Mr Shapps, what have the banks promised on this occasion? Amounts? Terms ? LTV? Underwriting Criteria? Perhaps The Big Society Banks can help??!
So far, we have The Big Society, Enterprize Zones and now the The First Buy Scheme.
The first is still a mystery, the second contributes little more than mass relocations of existing businesses and First Buy-type shared equity schemes do little more that frighten first-time buyers by the morass of bureaucracy into which they are suddenly plunged.
Once again, the REAL solution is in the hands of the BANKERS.
p.s. I am surprised by the fact that the Royal Institution of Chartered Surveyors is still allowing itself to be pushed about by the banks. They used to be a very powerful organisation which played its part in controlling house prices. The boom times prior to the 2008 crash turned the RICS into followers. They USED to be leaders. CLICK HERE