Why Building More Homes in the UK is Not Enough
The lure of foreign living is becoming far more desirable for financial reasons than it is for those seeking that work/life balance, as reports of the UK’s “dysfunctional” housing market has left many of Britain’s residents wondering if their money is better spent elsewhere.
Owing to the hangover from the credit crunch, an ageing population remaining in larger homes, and the significant gap between property prices and earnings, this culmination of factors is making the UK the toughest housing market in Europe.
Bob Pannell chief economist of the Council of Mortgage Lenders (CML) has spoken up about the “sluggish” market that faces first time buyers, and has argued that sales levels were the same as in the mid 1990’s.
In a report by accountants PwC there have been suggestions that more than half of the under 40’s will be renting homes from private landlords in the UK in 10 years’ time, and nearly nine in 10 (89%) of people agree that it is becoming increasingly difficult to buy your first home. Suggestions have been made that house prices will rise at an average of 5% a year, putting a typical home at a staggering £360,000 by 2020.
Even the current average house price sits at £193,048 with many still unable to find a deposit to get their foot on the ladder.
Housing Minister Brandon Lewis commented that “We’re planning to deliver 200,000 new starter homes which will be available at 20% discount to young first-time buyers”.
However despite these helpful policies that have been introduced by the government to encourage first time buyers and further investment in construction, this is currently not going far enough and does not offer a long term solution.
Although the European market is also being affected it seems that Brits feel more confident that they will get more value for their money on foreign soil, as figures recently released by the Office of National Statistics has revealed that a third of the UKs residents go abroad and don’t plan to come back.
While a strong housing market can be a sign of economic prosperity, across Europe seven in 10 (69%) of home owners believe that society would benefit if house prices now started to fall. As the housing market continues to be questioned, it can be a tricky time for those climbing the ladder to know where to lay their foundations.