The UK is facing not one but five concurrent mini housing crises – each with dramatically different consequences and solutions, research from Sky News finds.
The first comprehensive mapping of the UK’s different housing problems lays bare the scale and complexity of the country’s housing issues and finds that the supply shortage most politicians and journalists commonly cite as the biggest challenge is largely confined to London and the South East.
The research – carried out in conjunction with Neal Hudson, of Residential Analysts, one of the country’s leading housing economists – suggests that Downing Street may have been misdiagnosing the causes for Britain’s housing crisis all along.
While the shortage of new homes being built is indeed an issue in the capital and in certain other cities, especially those like Oxford surrounded by green belt restrictions, this problem is far less widespread than originally thought.
Indeed, fresh household projections recently published by the Office for National Statistics imply that far from falling short of its house-building targets in recent years, the UK may in fact have been building enough homes to satisfy the demand from the rising population.
Outside the capital, the country faces vastly different pressures.
For instance, in some hotspots in Scotland, Northern Ireland and the north of England, the real problem is not a lack of supply but a lack of demand. In these areas, which include Derry City, Redcar, Pendle and East Ayrshire, there is more than enough housing but because many residents have moved away to seek employment elsewhere, many of those homes lie empty. This is a housing crisis of sorts – but the inverse of the one we see in London.
Elsewhere, our research identified hotspots which are suffering from poor housing quality. In these areas, which include Ceredigion and Blackpool, Liverpool and Thanet, a high proportion of homes are old and in disrepair, particularly in the private rented sector.
Here, the solution is not to add more housing units to the total, as the government’s objective states, but to repair and potentially replace the existing housing stock.
In some parts of the UK – particularly affluent areas with high proportions of elderly residents – the crisis is not one of supply so much as distribution. In these areas, which include Stratford-upon-Avon and Rutland, there are technically more than enough bedrooms for everyone – but they are unevenly spread among the population, with some wealthier, older households living in big homes with many spare bedrooms.
Again, the solution here is not necessarily to build more, but to find better ways to encourage some of these people to downsize.
Finally, and arguably far more importantly than the supply crisis the government fixates on, there is a problem of cost and credit. In many parts of the UK the level of house prices is determined as much by how easily and cheaply people can borrow than by actual housing need.
Intriguingly, this credit crisis is far more widespread across the UK than the other crises we identified in our research – though it is particularly focused in London and the South East, and in towns where second homes are popular.
Neal Hudson, who carried out the research, said: “Housing is a complex and interconnected system within the economy and society. There is no simple single housing market.
“It seems reasonable, given this complexity, to suggest that there is probably no simple single housing crisis. Instead what we are probably witnessing is multiple overlapping issues that affect different parts of the country and different types of people in different ways and to varying degrees.”
He added: “There may be factors that influence all housing markets across the UK, indeed across much of the globe. There will, however, be others that impact more locally and within specific housing sectors.
“These are local crises and they demand local solutions.”
Source: Yahoo Finance UK