Lack of housing supply

house building essex colchester

The lack of housing supply is a story that just will not go away, numbers of properties currently available per estate agent have fallen again from 55 in July to 38 in August, we are actually at an 11 year low for properties available. Where we look to find the reason for the imbalance  at present is quite a task in itself, housing in general is in short supply in both the privately rented and the social housing sectors.

While numbers of those looking to buy dropped over the two months there is still alot of pressure on  UK property prices, especially in the South East and London, the UK property market just keeps going from strength to strength.

So a phenomenom is happening whereby fewer houses are being sold to the likes of first time buyers because they are just not affordable, the figures just do not add up for them when it comes to applying for a mortgage, so less activity at the bottom end of the market due to unaffordability is causing prices to rise, that can’t be right?   First-time buyers who are unable to afford their first home will be pushed to rent property in the short to medium term thereby increasing demand for property and pushing prices higher again, this is something of a vicious circle.

The other factor in all this is the buy-to-let  market which still appears to have legs even after  the intervention of the government with new tax rules applying to landlords income to be introduced soon, added to that lenders are beggining to tighten up further on lending to  the BTL sector in an effort to take the pressure off house prices, however without those landlords who will supply the houses to rent to those FTB’s who are unable to buy for themselves.

Even further up the property ladder there is a blockage due to those looking to downsize not being able to find a property to downsize to, so for present they are sticking with the property they are in, even though  it is too big for them now the family has flown the nest, they are  trapped due to lack of supply in their price range.

The government has a massive task on their hands to rebalance the housing shortage both in the rented sector and that for those who wish to buy their own homes, affordable homes that is. Successive governments have been promising to build more new homes, action is needed now, figures of 200,000 homes being built per annum were mentioned at the beginning of the parliament, lets hope it happens.

 

 

 

 

Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

You May Also Enjoy

Breaking News

First-Time Buyers Prioritising ‘Forever Homes’

A third of first-time buyer purchases are semi-detached properties, as young people turn to ‘forever homes’   Barclays mortgage data shows semi-detached properties rose in popularity in August, accounting for 33.5 per cent of first-time buyer purchases Four in 10 Barclays first-time buyer customers chose mortgages allowing them to complete their repayments over a 30+…
Read More
Estate Agent Talk

Closing the gap on client relationships and recommendations

New research from iamproperty has highlighted the growing disconnect between what buyers and sellers want from their agent and what they experience, which could be killing recommendations from happy clients. iamproperty’s quarterly consumer survey revealed that only a third of respondents (32%)¹ would recommend their agent following their experience. With many agents relying on recommendations…
Read More
Estate Agent Talk

Northern Ireland to expect over 25,000 new home movers

Belfast-based estate agency John Minnis has revealed that Northern Ireland is to welcome an estimated 25,000- 30,000 new arrivals from the UK and Europe over the next five years, as migration to the region reaches its highest levels in more than a decade. Recent figures show that 11,700 people relocated from other parts of the…
Read More
Breaking News

Red tape and rising costs stifling new-build availability across the capital

The latest analysis from London estate agent, Benham and Reeves, has revealed how protracted building timelines are preventing the capital’s housebuilders from delivering the level of new-build housing stock required to meet demand, with new homes currently accounting for just 7.5% of all properties listed for sale across London. Benham and Reeves analysed the latest…
Read More
Estate Agent Talk

UK’s new wave of ‘second cities’ offers strongest yield growth for property investors

The latest research from West One Loans has found that whilst investors may continue to favour the nation’s key cities such as London, Birmingham, and Manchester, a new wave of ‘second cities’ is delivering the strongest growth in rental yields. These emerging markets are offering investors the chance to achieve attractive returns, driven by rising…
Read More
Estate Agent Talk

Decline in change of use further constricting housing supply

Jonathan Samuels, CEO of Octane Capital, believes that a decline in conversion projects could ultimately prevent the Government from hitting its ambitious housing delivery targets, as the firm’s latest analysis has revealed that the number of homes created through change of use has fallen sharply in the last five years. Octane Capital analysed official Government…
Read More