Real Estate

Why are low-cost homes the need of the hour?

House prices in the United Kingdom reached an all-time high in June, as purchasers rushed to close before the temporary stamp duty exemption expired. While some adjustment is predicted, many people are concerned that they will never be able to get on the housing ladder due to a record high average listing price of £388,400 – up 6.7 per cent since the beginning of 2021. According to experts including estate agents in Sittingbourne, with property affordability at a 10-year low, there has never been a greater demand for social and affordable housing that can help aspiring homeowners save for a home and give safe shelter to those in the most challenging of circumstances.

The housing market in the United Kingdom is becoming increasingly unaffordable.

According to the latest Halifax estimates, the average UK property now costs 8.1 times average earnings, the highest level since lenders began tracking affordability a decade ago. The price-to-earnings ratio has risen by 8% in the last year, from 7.5 in 2020, while income growth has stagnated due to the pandemic, in stark contrast to rising property values. There has never been a greater need for affordable housing supply than now, as the gap between rich and poor continues to increase. However, house costs will be the least of their concerns for many. The financial burden of Covid-19 led one in every five renters to choose between paying bills and buying food, according to The Guardian last year. Due to the crisis, one out of every four people had to leave their tenancy early.

Many people were relieved by the government’s eviction prohibition, but when it ended in June, up to 400,000 renters were served with eviction notices or advised to expect them. The UK appears to be on the verge of a social housing plague, with one in seven people afraid that Covid-19 would make them homeless as income stagnates and job losses increase.

A scarcity of affordable homes

It is anticipated that the UK would need to build 340,000 new homes per year over the next decade to clear the present housing backlog and meet future demand. However, it is equally critical that the appropriate kind of housing be constructed. To alleviate the issue, the National Housing Federation forecasts that 145,000 new homes, or 43 per cent, will need to be dedicated to social rent or shared ownership.

Only 57,600 affordable dwellings were finished between April 2019 and March 2020, according to the Ministry of Housing, Communities and Local Government. Similarly, with 68,300 new projects underway, this suggests the number of projects that will be completed in the near future.

What are the alternatives?

With so many people in danger, property developers must move to boost the supply of affordable housing while also looking for other options that might provide immediate relief in the face of rising demand. 13 per cent of retail locations in the UK are currently vacant, with rates as high as 19 per cent in some places, such as the North East. These rates are only expected to rise, according to the PwC study, with an average of 16 outlets closing each day. According to Savill’s finding of ‘Why not convert our faltering high streets, department shops, and shopping malls to help alleviate the housing shortage, with the retail sector oversupplied by as much as 40%?’, the Centre for Policy Studies, repurposing this vacant retail space might result in the construction of 456,000 additional homes, or more than 500,000 if converted into flats.

A former William Hill shop in Salford is being converted into five assisted apartments that will provide safety and comfort to victims of domestic abuse. A former Lloyds TSB branch is also being refurbished to provide housing for persons in danger of becoming homeless. More needs to be done to prevent the UK’s chronic shortage of affordable housing from becoming unmanageable. With more individuals in need than ever, house builders, providers, and local governments must collaborate to find new ways to expand our affordable housing stock.

Build affordable housing

Rows of mock-Georgian style houses or four-bedroom townhouses are sometimes found to be completely out of reach for a first-time buyer. Even if new houses are built, if they are too expensive, they will not contribute to the existing housing issue. Instead, the government should concentrate on creating more affordable, modest homes for first-time buyers, such as two- or three-bedroom terrace houses or semi-detached houses. By constructing affordable homes, millennials are given a ray of optimism that getting their foot on the property ladder is on the horizon, which is a positive step toward resolving the housing crisis.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, and the Federal Trade Commissions. He is a graduate of Middlebury College. Email:[email protected]

Related Articles

Back to top button