Lack of housing supply

September 28, 2015
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

Mortgage Borrowing Dip

Key points: Net borrowing of mortgage debt by individuals decreased to £3.9 billion in September, from £4.2 billion in August, below the previous 6-month average of £4.9 billion. Net mortgage approvals for house purchases decreased to 53,400 in September, below an average of around 58,800 over the previous 6-months. Approvals for remortgaging increased to 42,600…
Read More →
Breaking News

Autumn Budget 2026: Property industry reaction

Following today’s Autumn Budget, reaction from property industry experts on six key areas for the property market. First-time buyer support: The £4.7bn Your First Home equity loan scheme, supporting 70,000 buyers, alongside the introduction of a new First Time Buyer ISA. Inflation and borrowing costs: The extension of the fuel duty freeze, household energy support…
Read More →
Breaking News

Can you legally BAN Halloween Trick or Treaters?

People who dread the annual knock of trick-or-treaters may have more power to keep Halloween callers away than they realise. As millions of children prepare to take to the streets on October 31, a property law expert has explained what homeowners can do if they do not want strangers walking up their path or knocking…
Read More →
Estate Agent Talk

What the sector need to do differently to give first time buyers a chance

By Peter Hawley, Director, SOWN (part of LRG) The mortgage and property sector needs to stop assuming that younger buyers are either ready to buy outright or not ready at all. For many, the reality is somewhere in between. They may have stable employment, a deposit and a strong desire to own, but still find…
Read More →
Letting Agent Talk

The 50-property tipping point: when landlords need a different approach

By Adam Hills, Client Services Director, LRG Living Markets A sizeable residential property portfolio can create significant opportunities for long-term income and capital growth. But as it expands, so does the complexity of managing it effectively. For landlords with 50 or more properties, the challenge extends well beyond finding tenants or collecting rent to communication,…
Read More →
Estate Agent Talk

Home is where the stress is

Couples find first-time buying more anxiety-inducing than buying solo First-time buying: Anxiety doubles when finding a home with your partner! Stress and anxiety significantly increase when buying a first home with your partner compared to flying solo The likes of searching for a property, applying for mortgages and progressing through the legalities are all significantly…
Read More →