How the housing market must change to meet new needs
The arrival of the summer months is usually a busy time for estate agents. However, it seems that the market is being held back by a lack of supply.
In their April survey, the Royal Institution of Chartered Surveyors reports that there is a marked lack of property for sale, with each estate agent having on average just 43 properties on their books. Market stagnation is blamed on inflated asking prices, tougher lending rules, rises in stamp duty and economic uncertainty in the face of Brexit, meaning that more people decide to renovate their homes rather than move.
THE HOUSING WHITE PAPER
February’s housing white paper which the government aptly entitled “Fixing our broken housing market”, looked at several ways in which the supply of new housing can be increased to meet the growing shortfall. In 2016, just 168,000 new-build properties came onto the market, way below the 250,000 needed every year to keep pace with demand.
To broaden housing options, the white paper proposes a shift away from an almost exclusive focus on home ownership to, and increased emphasis on, multi-tenure house building, and the construction of more rental property. Family-friendly tenancies which are two to three years long are to be actively encouraged.
GREEN BELT ISSUES AND HOUSING STARTS
Under its proposals, councils will be required to produce a realistic plan for local housing demand and review it every five years. Preservation of the Green Belt concept is confirmed and councils will only be allowed to alter Green Belt boundaries in exceptional circumstances.
Councils and developers are expected to consider higher density, especially in areas which have good transport links. The proposed strategy also includes giving councils powers to pressurise developers to start building on land they own. They will be expected to start building within two years of receiving planning permission, as opposed to the current three-year deadline.
Currently 60% of new homes are built by just ten companies, so the government will offer support to small independent builders through a £3bn Home Building Fund.
To free up more family homes, the government plans to prioritise the building of retirement housing, enabling older people to downsize from properties that are too big for their needs to affordable property designed and tailored to their later life needs.
The information within the article is for information purposes only and is purely market commentary and does not constitute individual advice.