With falling house prices and a temporary collapse in house building, it may seem strange to be talking about a housing shortage. However, if we put aside the short term difficulties of the credit crunch and falling demand, there is an underlying problem that in the long term housing supply is forecast to fall well short of housing demand. For example, the government have stated that the UK requires an annual rate of 240,000 houses a year if we are to meet demand. However, the current rate is only 125,000. Even during the housing boom it was not possible to meet demand.
Reasons for Housing Shortage
Rising Demand
Firstly, the population of the UK (unlike many other western countries) is rising. This is partly driven by immigration and higher birth rates.
Furthermore, the number of households is rising faster than the population. For example, there is an increase in the number of one person households. This is due to factors such as divorce rates, ageing population and people leaving home earlier.
There is also rising demand for second homes and demand from abroad. The demand from foreigners is particularly noticeable in parts of London. Russian oligarchs take advantage of UK tax law to live in the UK and avoid paying tax. (It is rather perverse that locals are being forced out of their own housing market, so that Russian oligarchs can avoid paying tax. But, this isn’t just an ‘urban legend’ there is a lot of truth in it.
Restrictions on Supply
Supply of housing in UK, regularly fails to meet the rise in number of households.
Not In My Back Yard.
The truth is that most people agree it would be good to build new houses. But, we would just prefer them not to be built anywhere near we live. I am as guilty as anyone. There is a proposal for a new eco town just outside Oxford, at Weston on the Green. I am opposed to it because it would mean losing a cycle track at an airfield. As an economist I agree more houses should be built, but on a personal level I don’t want the houses built here.
Protect House prices
An obvious motive for opposing homebuilding is that it increases the value of existing home prices. If 10,000 new houses are built in our town, it can only lead to lower prices. If we stop new houses being built, it increases the value of existing houses. Therefore, the majority of the population (homeowners) have a vested interest in preventing new homes being built. Some young, first time buyers, will be keen for new houses to be built, but, they are in a minority and so don’t have much influence in the local democratic situation
Environment
Britain has beautiful countryside, there is rightly an instinct to protect it. If we build homes everywhere and cover the south east in concrete, we will lose something special. This is a powerful motive against the building of new houses.
What does this Housing Shortage Mean?
Many in the UK, with good reason, would like to see lower house prices so that first time buyers can get on the property ladder. However, if demand rises faster than supply, then in the long run house prices will continue to be much higher than incomes.
Inequality. The current situation has benefited existing homeowners who have seen an increase in their wealth. First time buyers, will face tremendous costs to get on the property ladder.
Related
The housing shortage has its routes back in the early eightys when it was decided by Thatcher and her government not build councill houses any more and sell off existing stock.We are now left in a situation that despite the house market collapse of the last year houses are still difficult and over priced for the normall working class family.
You deal with this housing shortage in 2 ways
1. Build councill houses again and as many as possible.
2. You look at the people that have three bedroom houses that have children that have grown up and left home and rehouse these people into flats and give them limited compensation for giving their councill
houses. You then put familys in to these homes.
These 2 measures will reduce waiting lists alone but to really work on the problem we need to stop all immigration and make a full effort to educate kids as young as eleven and twelve about birth controll.
what do you think we need to do to reduce the population of the UK to reduce the Housing shortage reaching a crisis level?
In Mansfield Nottinghamshire 5000 new homes are being built, that have not gone
Through the correct planning procedure. They are bang built on green belt land that have not gone through the correct channels, and out of these 5000 homes only a few are gunning to British citizens that need a home, the majority will go to immigrants that are working in the UK through agencies. Aren’t our politicians corrupt
That’s “DEMOCRACY” for you?
C.R.A.I.G.
The COLLECTIVE REVOLUTION AGAINST INACTIVE GOVERNMENTS