Affordable housing is one of our biggest concerns. Prime Minister David Cameron promises to build 200,000 new starter homes for new buyers… wait, aren’t we “generation rent”?
At the moment there is a lack of affordable housing across the UK. This lack of homes is pushing the price of houses up, up and up – meaning fewer people are able to buy their own home. There are a number of reasons why this is happening. The government builds way fewer houses than it used to in the 1960s and 1970s. The Conservative government in the 1980s led by Margaret Thatcher sold off council houses under the “right to buy” scheme. The scheme was a popular policy, but critics claim it created a shortage of housing. Another major reason is that planning permission for houses takes a long time to be granted. Not all permissions lead to houses being built.
Prime Minister David Cameron just promised to build 200,000 new homes which will be available for people to buy.
“Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent …we’re replacing them with new rules… you can build here, and those affordable homes can be available to buy.”
Whether this is achievable is uncertain… in 2007 the Labour government set a target of building 240,000 homes a year. Admirable idea… but they failed to meet this target. Even if the government hits this target it may not solve high rents. The Guardian reports that offering subsidies (benefits usually in the form of a cash payment or tax reduction) to builders creating more homes has actually made things worse.
Many call 16-25 year olds “generation rent” as rising house prices mean we are less likely to be able to afford to buy a house.
The housing crisis is also pushing up rents – even faster than the price of actually buying a house. The cost of renting a room in London has jumped more than 20% in the past five years. Landlords, rejoice.
The average price of renting in London is now £1,500 a month; outside the capital is £751. Don’t forget that when renting you’ll also usually need a month’s rent as a deposit. Affordable for some, but not for those searching for work, on lower paid jobs or zero-hours contracts.
It would seem new affordable houses are definitely needed. However, the i100 reports that housing charity Shelter is skeptical over whether David Cameron’s promised new homes are actually that affordable. They say on the minimum wage only 2% of homes would be affordable. Hmm.
One thing is for sure; rents are rising faster than our wages. Paying more for rent means you’re unable to save as much (if at all) for a deposit or mortgage, lowering your chances of getting your own place or saving for a pension. In many countries it’s the norm to rent all your life, but in the UK we seem to want to own our homes. The result? More and more graduates are moving back in with their parents to save. There’s been a 28% increase in 20-34 year olds living at home since 1997.
Searches for shared rooms have risen dramatically in the last few years as others cut costs by sharing a room. It takes two to tango.
The problem is that as people become more desperate for a place to live they end up forking out extortionate amounts for cramped and often substandard accommodation.
Take the single room in Clapham advertised at £800. Or the £730 per month “fully contained” flat … basically a bed in a kitchen. This “loft conversion” (see; cupboard) was posted at the reasonable price of £40 per week. The catch – there is no standing room. Your affordable halls of residence seem like a distant daydream, don’t they?
Warning; thinking about the housing crisis for too long may lead to nausea/anger/fear/a cold numb feeling spreading through your whole body.
However we’re practical folks here at Scenes of Reason so we’ve compiled a some ways to escape the housing crisis and jump on that property ladder.
The government runs a “Help to Buy” scheme which allows you to buy a house with a smaller deposit.
Under the scheme first time buyers are able to buy a property up to £600,000, paying only 5% upfront as a deposit.
Usually you’d need around 10% for a deposit. Happy days!
The government is also offering a loan to cover 20% of the price of a new property. For the first five years you won’t be charged fees on this loan.
The BBC also has a calculator which tells you where in the country is cheaper to rent or buy. However, perhaps just buying or building houses may not solve the housing crisis.
According to the Empty Homes Charity there are over 200,000 homes left empty for over six months, and over 600,000 houses empty in total. So perhaps to solve the housing crisis we should start trying to fill these houses, rather than just building new ones?
Will David Cameron deliver on his promise to build 200,000 new homes? Will these even be affordable? How can we end the housing crisis?
Take action: If you think more needs to be done, sign the Housing Federation’s Change.org petition “Solve Our Housing Crisis”