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 growing quickly, the situation is only going to get worse. It is estimated that the UK needs to build an extra quarter of a million homes in order 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. 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. This was great for many low and medium income families at the time, but the legacy of this initiative is still being 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 biggest issues at play — and one of the most difficult to solve — is the economic forces that peg back construction. House builders purposely hold back on building new homes in order to keep prices high. In other sectors, new competitors would enter the market and redress the balance, 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, which has actually been driving house prices up in many areas.
What can be done?
The most disheartening aspect of this whole sorry situation is the fact that there are several solutions available — the government just doesn’t want to intervene. For example, rent controls could be brought in. They’ve been relatively successful in U.S. cities such as New York, and they would have an immediate impact on London’s housing crisis in particular. Another step that has been mooted is a so-called mansion tax, which would sedate the UK’s thirst for home ownership somewhat.
More radical solutions that have been suggested include the seizure of undeveloped land owned by housebuilders, national legislation to deregulate the planning process and the imposition of 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?
It is clear that this issue is not going away anytime soon. Unless there is an apolitical solution that increases housing stock substantially over the next century, the can will continue to be kicked down the road. In truth, there is no quick fix, and no single initiative will succeed on its own. A comprehensive plan involving several measures is the only way we can ensure that future generations can enjoy the same basic 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. With so many homes left empty or unsold, we’re wasting a huge opportunity. Cutting through red tape and reducing the time it takes to process house sales is what these companies specialise in. And the faster homes are sold, the quicker the people who need them can move in.