Around 442,000 homes would need to be built annually for the next 25 years in order to relieve the UK’s housing crisis. That’s according to a report by the leading economic think tank for cities and town centres.
The Centre for Cities analysis shows the UK is short of 4.3 million homes. With the government’s promise to build 300,000 homes a year, it would take 50 years to fix. Worst hit is the Greater South East, while in England as a whole a typical house is more than 10 times the average salary.
UK’s housing crisis dates back to post-WW2
The report says Britain’s housing supply problem dates back to 1947 and the introduction of the Town and Country Planning Act. This is contrary to the belief by many that it was the Tory government’s Right to Buy legislation, introduced in the 1980s, that was the main culprit, particularly since council house building was also cut back at the time.
Comparing the UK’s housing history with that of it is continental neighbours, the report points to a drop in house building of more than one third after the introduction of the 1947 Act. It went from a housing growth of two per cent a year up to 1939 and to 1.2 per cent from 1947 to today.
Call for change to current planning system
Changing the discretionary planning system that local authorities currently use, to a new rules-based, flexible zoning system would greatly improve the rate of new house building, insists the organisation.
Andrew Carter, Chief Executive, Centre for Cities said: “UK planning policy has held back the economy for nearly three quarters of a century, stifling growth and exacerbating a housing crisis that has blighted the country for decades.
“Big problems require big solutions and if the Government is to clear its backlog of unbuilt homes, it must first deliver planning reform.”
Sellers reducing property prices by around 4.5 per cent
Meanwhile, for those who do have a property and are looking to sell, be prepared to reduce the asking price by around £14,000. That’s according to property portal Zoopla’s latest report which shows sellers are cutting prices by an average of 4.5 per cent. In London and the South East of England the cut is slightly bigger – at 5.5 per cent.
The reason for this is isn’t just the cooling off of the market, but the fact there are more homes for sale. According to Zoopla most estate agents these days have around 24 properties for sale. That compares to just 15 for the same period last year. As a result, nearly half of sellers (40 per cent) have been forced to lower the price of their property in order to secure a sale.
But, considering the average property rose by just over 20 per cent during the pandemic (resulting in an average gain of more than £48,000), the current cut shouldn’t be particularly hard-going for long-term home owners.
Richard Donnell, executive director of Zoopla says he expects a ‘soft landing’ for the property market this year, with property price falls of no more than five per cent.
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