What causes the Housing Crisis in the UK, is there a solution and what does the future hold?
No wonder there’s a housing crisis in the UK; housing stock is already critically low, and with the population snowballing, the situation will only worsen. The UK needs to build an extra quarter of a million homes to alleviate the issue, but the current rate of housebuilding falls well short of this target. Tragically, more than 200,000 homes in England alone lie empty, and there is no government plan to utilise them.
Why is this happening? And what — if anything — can be done to solve the UK’s housing crisis?
What is causing the UK’s housing crisis?
Unfortunately, this is a highly complex issue with several root causes. First, the UK’s property market has been heating up for many years now, which has attracted billionaire property investors from all over the world. Particularly in London, this phenomenon has led to homes in highly desirable areas lying empty — waiting to appreciate or for a buyer to pay a premium.
Another big issue contributing to the housing crisis is the shortage of social housing. During the 1980s, Margaret Thatcher’s right-to-buy policy saw hundreds of thousands of council-owned homes fall into private hands. Great for many low and medium-income families, the legacy is still felt today. Successive governments have failed to replenish social housing stock, which has caused overcrowding and a generation of young people living with their parents.
Severe planning restrictions on “green belt” land have restricted housing developments all over the UK. Wealthy property owners in rural areas have objected to developments on the grounds of spoilt views and cultural vandalism. The Campaign to Protect Rural England has also stopped many housing developments on the fringes of the UK’s big cities over the years.
One of the most significant issues at play — and one of the most difficult to solve — is the economic forces that peg back construction. For example, Housebuilders purposely hold back on building new homes to keep prices high. New competitors would enter the market and redress the balance in other sectors, but this just isn’t happening. In addition, banks are reticent about lending to all but the most financially stable people in society.
Other factors contributing to the UK’s housing crisis include leniency towards rogue landlords, cash-strapped councils and the government’s controversial Help to Buy scheme, driving house prices up in many areas.
What should we do?
The most disheartening aspect of this sorry situation is that there are several solutions available — the government doesn’t want to intervene and may bring in rent controls. They’ve been relatively successful in US cities such as New York, and they would have an immediate impact on London’s housing crisis in particular. Another step mooted is a so-called mansion tax, which would sedate the UK’s thirst for homeownership somewhat.
Some radical solutions suggested are the seizure of undeveloped land owned by housebuilders, national legislation to deregulate the planning process, and imposing a land value tax. There have even been calls to ramp up the production of 3D printed homes — something that could account for a quarter of all new buildings in the UAE by 2030.
What does the future hold?
This issue is not going away anytime soon. Unless there is an apolitical solution that increases housing stock substantially over the next century, politicians will continue to kick the can down the road. In truth, there is no quick fix, and no single initiative will succeed on its own. However, a comprehensive plan involving several measures is the only way to ensure that future generations can enjoy the same fundamental human right of a home as most of us enjoy today.
House buying companies such as Flying Homes have a small part to play in alleviating the housing crisis. But, with so many homes left empty or unsold, we’re wasting a huge opportunity. These companies specialise in cutting through red tape and reducing the time it takes to process house sales. And the faster homes are sold, the quicker the people who need them can move in.