British Housing: Cost & Ownership
More news is coming out detailing the never-ending issue of the lack of residential property especially affordable housing throughout Britain. An enquiry is being held into the situation by The House of Lords Economic Affairs Committee with input from Liam Halligan author of ‘Home Truths: the UK’s chronic housing shortage’.
Mr. Halligan reports in the Financial Times that the UK has built nearly 3 million too few homes in the past 30 years with the result making home prices out of reach for so many potential buyers and younger workers dealing with high rents. Not since the 1930's has the situation made potential owner-occupiers less likely to afford housing.
'From the north-west to the Midlands, beyond London and the south-east, even well-paid professionals are often “priced-out”. The average British home now costs eight times average earnings, compared to just four times during the 1990s. The share of 25-34- year-old owner-occupiers has plunged from 67 to 38 per cent, with well over half a generation now locked out of property ownership at this crucial family-forming age.'
He also reports that home ownership has fallen from 73% in 2007 to 63% which is below average when compared to the EU. Mr. Liam also reports that a a result:
'And lower down the income scale, an endemic shortage of social housing is driving a shocking rise in overcrowding and homelessness.'
Housing schemes such as Help to Buy have increased demand for more housing to be built which has benefitted the builders financially but homebuyers are, particularly younger ones wanting to get on the home ownership ladder, are resulting in buyers being drawn to sub-standard new-build housing. And with builders taking a go-slow approach to construction causing a lack of new homes the prices keep increasing.
Mr. Liam in the Financial Times:
'We must inject competition into this once vibrant industry, helping small firms — which build out permissions quickly to aid cash flow.'
'Builders producing less than 100 homes a year now account for barely a tenth of all output, down from almost a third before the global financial crisis, which blew so many of them away. The top 10 developers meanwhile build almost two-thirds of new supply. In July 2016, the Lords Economic Affairs committee concluded the UK housebuilding industry “has all the characteristics of an oligopoly”. Peers should now call for a full Competition Commission inquiry.'
He also adds that Britain has 'uniquely bad affordability problem' partly as a result of low interest rates and quantitative easing. One recommendation is to use greenbelt land for new developments as the size of this land, 13% of Britains total land mass, has more than doubled since the 1970's.
'Only bold action can break this deadlock. I propose a transparent system that splits planning gain 50-50 between developers and local authorities. Planning gain is shared in this way, and channelled into infrastructure spending, across much of the world — the UK is an outlier.'
New Planning Scheme in Richmond
The planning council in Richmond has agreed to a two-year funding for the Empty Homes Grant Programme that would make available empty properties into use for affordable and temporary housing needs. Council tax records indicate that 399 properties in the borough have been unoccupied for six months or more in a report by the Sutton & Croydon Guardian (SCG).
Councillor Liz Jaeger, vice-chair of the Adult Social Services, Health and Housing Services Committee says in the SCG that the program: “isn’t something terribly new, and is something that this council has done in the past”, and “very much in support” of the plan.
The previous program by GLA was stopped in 2016 which had caused an increase in empty properties. Other boroughs such as Wandsworth that had their own programs for empty homes have been successful in keeping the number of empty houses at a lower level.
The report in SCG states that:
'Since 2016 Wandsworth Council has seen 63 units successfully apply for Empty Property Grant funding, and a further 114 units being brought back into use without the need for a grant.'
For Richmond the the plan for the next two-years would allow owners to apply for a grant of £25,000 with a five year lease of the property to the local council. Only one grant per owner per financial year or a maximum of five grants with all of the units being at the same address.
'The proposals also include the appointment of a fixed-term Empty Property Officer to help identify properties which are considered to be empty. This role will be paid at £53,650 per annum for a period of up to two years.'