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With housing affordability at its lowest level in 150 years and housing construction still not keeping up with demand, it’s clear that housing is likely to be a key political battlefield in the next general election.
Housing has become the most pressing issue facing all political parties, with some 3 million homes built over the past three decades, far short of meeting the ever-increasing demand for housing. The rising cost of mortgages and the shortage of real estate have caused the proportion of homeowners to fall from 70.9% in 2003 to the current level of just 64%.
Home ownership remains the preferred form of ownership for millions of people. While the demand for housing continues to rise, we are currently facing a chronic housing shortage, which has led to skyrocketing housing prices, further increasing deposit and mortgage requirements.
This means it’s getting harder than ever for new buyers to climb the stairs and now is the hardest time to afford a home since we started in 1875, a sad reflection of decades of government inaction on housing. crisis in the UK.
It has been nearly fifty years since Margaret Thatcher said she wanted the UK to become a “property-owning democracy” but as we see the Level Up Bill reach its final parliamentary stage in April, the government’s commitment to build 300,000 new homes every year, the mid-2020s can be left in the annals of history. Instead of having a specific government target for housing development, the government wants to make councils responsible for developing local plans for new levels of housing development.
Everyone agrees that there is no panacea when it comes to tackling the UK’s housing crisis, but national housing targets exist for a reason. Indeed, the Home Builders Federation has previously warned that abandoning the annual target of 300,000 homes could result in 100,000 fewer homes being built each year and deprive the economy of £17bn of housing production and supply chains. He also warned that annual new home deliveries could fall below 120,000 in the coming years, the lowest level since World War II.
An excellent recent report from think tank The Center for Cities says it will take at least 50 years to catch up with demand, even if the government’s goal of 300,000 new homes a year is reached. According to their report, 4.3 million homes are currently unfinished.
As the next general election approaches, will any political party pick up the baton of homeowners and address the acute housing shortage? The challenges facing homeowners are deep-rooted and wide-ranging, but building enough homes to meet demand is the right place to start.
Achieving these housing targets will be difficult, and all parts of the market, from private developers to housing associations and local governments, will need to achieve this level of housing construction. However, with sufficient political will on the part of any future government, the long-standing problem can certainly be overcome, and this will begin to meet the homeownership aspirations of millions of people.
Home ownership was once a rite of passage for young people, but over the past decade, housing prices have become more and more out of reach for millions of people.
Adequate housing has been achieved before—the 1960s was the last decade of truly massive housing construction, and we saw the largest number of new homes built, over 3.5 million over a ten-year period.
Since then, the number of new homes built every decade has been in decline, with the latest data showing just over 1 million new homes built in the 2010s, the lowest since the war. Despite continued growth in demand for homes, the number of homes built has declined decade after decade, down 69% since the late 1960s.
Housing targets help drive supply and provide the consistency and stability that the market desperately needs as we strive to restore the balance between supply and demand.
We need a nationwide conversation about the reasons why we are not building enough houses, and we need all political parties to address the real housing problems this country is facing. It is clear that people are protecting their local communities and do not want undue disruption or pressure on services and infrastructure, but the trade-off is between that and millions of people being denied access to the benefits of home ownership.
Those who advocate the effective demolition of 300,000 residential buildings say they want local residents to take control. We agree that this is an important component of community development decision making, but it is not a reason why the government should abandon national housing targets.
Political parties are now realizing that a solution to the housing crisis could be the real winner of the vote, and many commentators expect housing to be one of the key battlegrounds in the next general election.
Martiz Carton is Director of Mortgage at the Leeds Building Society.
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