This week’s report from The National Housing Federation highlighted a number of serious issues blighting the UK housing industry. It stated that the UK’s ‘chronic’ undersupply of homes is reaching crisis point; and whilst the government wants to embark on a £4.5bn project to build 170,000 affordable homes over the next four years, developers are cautious, fearing that people will not be able to raise the finance for mortgages against these homes.
It is clear that the combination of high house prices and borrowing costs is making homeownership out of reach for an increasing number of people. The number of home owners is estimated to decline from 67% to 63.8% in the next 10 years – a factor which will push up rental prices up and arguably, push quality down. Things are also looking bleak in the social housing market. A recent report from the National Landlords Association claimed that over half of UK landlords plan to cut the number of properties they let to social housing tenants as a result of government cuts to Local Housing Allowance. With 1.5 million people on the waiting list for social housing already, surely this is a ticking time bomb for the government?
An obvious solution is being overlooked. 80% of elderly people in the UK are homeowners. They are sitting on property worth an estimated £3 trillion – many of which are under occupied family houses. These are the high quality family homes that are currently chronically undersupplied. If elderly people were encouraged to move into suitable, high quality retirement housing to rent or buy these homes could become available. Herein lies another problem – retirement homes are also in chronic undersupply. The government needs to work backwards to solve this Catch 22 situation. Rather than simply ‘Get Britain Building,’ it needs to first needs to think about how to solve the crisis and look first at building attractive retirement properties which might get the market moving again.
