by Nick Smith
Wednesday, July 5th, 2017
Are young families being priced out of the housing market?
So an interesting article in the Guardian yesterday about the fact that young families are being priced out of the rental market in two-thirds of the UK. It seems like the latest in a long, long line of housing crisis articles. With so much doom and gloom its seems the only answer is to use the little bit of green belt land left and build away, until I guess there is no more to build on and at that point I guess people will sit down and discuss practical solutions to this increasing problem.
Shelter say that a family can afford to spend about 33% of their income on rent or a mortgage but the National Housing Federation say 25% whereas in the US the Department of Housing say the figure is 30% whatever the exact figure the problem is not going away.
Whether the answer is to build more affordable housing or make more of what already exists it seems that there are far more problems than solutions here.
Building more houses seems like a plan, the more houses we have the cheaper they become as the supply outweighs demand but is this likely to happen any time soon? New homes are built and a premier is put on them of around 10-20% due to the ease of moving in and not having any work to do but how is this going to help a young family who are likely to be on a single income scrap together a hefty deposit before approaching their friendly bank for a mortgage? Unless they have a parent network that can help the answer is probably that it won’t help them a bit.
The second solution seems to be to hit those pesky landlords that are buying up this housing stock and then renting out at inflated prices due to the high demand. Really? Does anyone really believe this? Many of the landlords we deal with have looked at buying properties (often one) or inherited them to provide for their old age. Are these the ones the government are looking to “take out” with the new stamp duty and landlord regulations?
New legislation looks to hit the little man again and for the serious landlord they are again exempt from these tax changes and have been given a few loopholes to ensure they come away relatively unscathed.
Not fair well we deal with plenty of larger scale landlords and like us they are just trying to make a living and have worked very hard to build a portfolio to help them achieve their goals and ambitions and why should we penalise this when ultimately all of us are trying to make a better life for ourselves aren’t we?
The media’s relentless pursuit of London and all things London I think foggy the picture. People can’t afford to live in the Capitol, people are being squeezed out, is this anything new? A trip to London will show you why, it’s a bustling metropolis that’s full to the brim and that is driving up prices but ultimately the only solution to this does not lie in building more houses, it involves people moving and getting jobs in other towns and cities and growing those economies. It involves clever planning and incentives for this migration of workforce and not letting a segregated Britain carry on allowing these gulfs in the haves and the have not’s.
We will be coming up with some practical solutions to the housing crisis over the coming weeks but we would love to hear your thoughts on this. Do you think rents are too high? Is this a problem in Wales and if so what are your ideas to make things better?