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The UK Housing Market: A Place of Your Own?
Is a new house building programme on its way?
Successive UK governments have tried to tackle the housing problem; demand for housing is very unevenly spread across the country. In general, there is a surplus of homes in the north and an acute shortage in the south. The following effects are being felt:
- rising homelessness
- higher numbers of people living in temporary accommodation
- severe overcrowding in homes is on the increase
- prices have escalated leaving most first-time buyers stranded
Redevelopment plans being drawn up. © Photolibrary Group
The Government plans to get 200,000 new homes built by 2020. Four areas have been targeted for the house building programme:
- Ashford, Kent
- M11 corridor, Essex
- Milton Keynes, Bedfordshire
- The Thames Gateway (both sides of the river, east of London)
The Barker Review:
The Treasury has commissioned a review of housing supply, overseen by a former member of the Monetary Policy Committee, Kate Barker. The Barker Review concluded that continuing to build new houses at the current rate is not 'a realistic option, unless we are prepared to accept increasing problems of homelessness, affordability and social division, decline in standards of public service delivery and increasing the costs of doing business in the UK'.
In her findings, Barker reported on the following aspects of the UK's supply of housing:
- Demand for housing is increasing
- Demographic trends and rising incomes are driving this increase
- In 2001, the level of new houses being built fell to its lowest since 1945
- In the period 1992-2002, 12.5% fewer homes were built compared to the previous decade
- The housing market contributes to macroeconomic volatility, leading to problems for businesses and economic planners
- House affordability has got worse: in 2002 only 37% of new households could afford a property, compared to 46% in the late 1980s
- Higher house prices increase the wealth gap between home owners and others
- This restricts labour mobility which is vital if economic growth is to be evenly spread
(Source: The Barker Review of Housing Supply, executive summary)