Meeting the demand

When you talk of rising house prices, the critical need to help ease the affordability crisis or the lack of family homes, the same spectre dominates the horizon.

Supply and demand is one of the fundamental economic ideas and the foundation of the capitalist model which we find ourselves living in today. However, the marketplace which operates in the UK today finds itself in a bit of a meltdown situation. The housing market is in a perpetual state of shortfall and despite government reports and targets to increase the number of properties being built, we are still staring down the barrel.

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Simon Biddle, head of marketing and communications at Infinity Mortgages, remarks: “The shortage of housing is shown by the fact we needed to build a city the size of Leeds between 2000 and 2010 and we are nowhere near to achieving that.”

This isn’t a problem which has suddenly appeared from nowhere. A government review of planning laws and the housebuilding process was completed by Kate Barker last year and demanded sweeping changes to help alleviate the upward pressure on house prices by a lack of homes and the difficulties in gaining planning permission. However, with Barker warning a year on that the housing shortage in some parts of the country may never be solved, can the UK ever build enough homes?

Planning performance

One area which the Barker Report highlighted was the complexities and the tardiness which hijacked the planning process. While much of the report’s focus was on the structures which applications had to go through, one of the main problems which constructors face, whether they are building houses, wind farms or reservoirs, is ‘NIMBYISM’, or ‘Not In My Back Yard’. Therefore, while people may want to see an end to escalating property prices, they don’t want more homes built near them.

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Another contentious issue is the debate of where to build. In 1998, the government set a target of 60 per cent of new housing should be on brownfield sites; a target which it is currently meeting with around 75 per cent of building on brownfield. However, much of British psyche is based around the idea of green and pleasant land. Therefore, when a development talks of concreting over a greenfield site, many people are up in arms.

Rachel Snow, head of external affairs at the Building Societies Association (BSA), says: “The government needs to allow new development to take place, to recognise the high level of demand that exist. In doing so, it should recognise that demand cannot be met exclusively by brownfield development, and allow sensitive greenfield development to take place where appropriate, to help affordability in rural areas.”

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This competition between green and brownfield is set to escalate as the number of easily developable brownfield sites are starting to dry up. To maintain the high proportion of new homes being built on reclaimed land, developers will need to start looking at areas which require more work, and money, to recycle.

Biddle believes the government needs to address this problem. “A lot of the easy brownfield land has gone but the difference is now we have got to focus on bringing on the next stage. Maybe we need a government scheme which funds the clean-up of these sites and helps make this land viable.”

Location, location, location

However, while the supply of housing may need some serious attention, it must also be considered that it isn’t the end of the problem. People may want to own a property but they also want to live in a neighbourhood which is conducive to their needs, such as transport infrastructure and good schools. This is why, despite the shortage of homes in the UK, there are thousands of properties sitting unoccupied because of the undesirable location they sit in.

This point was made recently in a report by the Royal Commission on Environmental Pollution, whose chairman, Sir John Lawton, said:

“Commissioners are astonished that, on the eve of the new phase of urban regeneration and expansion, we lack an over-arching urban environment policy to co-ordinate the provision of housing, transport, energy and other vital services. Tinkering with any one of these issues in isolation will fail.”

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The consensus being drawn by many is that the government still has much further to go if it is to create a policy which will provide an adequate solution to the nation’s housing crisis. Much has been said recently by various bodies and government ministers but action is now needed to back up these words.

However, government action isn’t enough to solve the shortfall. The attitudes of ordinary people have to change as well. British people seem to believe owning a property is a right, while parents dream of living in a family home with a large garden to bring up their children. These desires may have to change in the future to accommodate a rising population, changing social demographics and a lack of property and space to build upon.

Snow argues: “High density urban living, near public transport links will in the future be the greener way to develop.”

But as Mary Riley, managing director at Advanced Flexible Self Build Mortgages Limited, believes: “People don’t want to live in a one-bed flat as if they start a family, they will want at least two bedrooms. There may need to be a change in attitudes but I believe people will still want a two-bed property.”

So while it seems the government is beginning to understand the need for more homes, it seems it may take a lot longer for ordinary people to realise there may be some sacrifices required of them to allow everyone a castle of their own.

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