A recently published White Paper on the housing market in England described it as “broken”. According to the White Paper the reason for this is simple- not enough houses are being built, now and in the past and supply significantly lags behind demand. It is estimated that 160,000 new homes have been built annually in England since the 1970s but the actual supply needed to keep up with an increase in population and a historic under-supply of housing is believed to be closer to 250,000.
And it is not the lack of land to build on which is the problem, with only 11% of English land currently built on. Instead the White Paper blames the chronic under-supply of housing on three main factors namely:
- There are not enough local authorities planning for the homes they need
- House building is too slow
- The construction industry is too reliant on a small number of big players
The gap between demand and supply has of course an impact on house prices. Since 1998 the ratio of average house prices to average earnings has apparently more than doubled, making home ownership unaffordable for millions of people. The Coúncil of Mortgage Lenders predicts that by 2020 only a quarter of 30 year olds will own their own home.
Scotland faces similar problems. According to industry body Homes for Scotland the total number of new houses being built in Scotland each year is still down 40% on pre-recession levels, whilst the country’s population has grown to its highest ever level.
“As Sajid Javid said, the root cause of the housing shortage is the simple fact that not enough houses have been built, and that applies equally in Scotland”,commented Nicola Barclay, Chief Executive of Homes for Scotland.
“We need to move away from thinking of housing policy in terms of election cycles and narrowly focusing on ‘affordable housing’ and instead look at the requirements for all tenures over the next 15-20 years” she added.
“We also need to be brave about the issues that are holding housing back, like the availability of land and the provision of infrastructure, or we will never have enough homes to meet the diverse needs and aspirations of those living in Scotland” she said.
If you intend to buy or sell property in Scotland, I can help. Please contact me, Marcus Downie, on 0141 552 3422 or by email on marcus@mitchells-roberton.co.uk