UK housing supply - the problem & solutions

[Jozhua]

It goes without saying that you cannot have unending, infinite growth but the UK is far from full. If you travel around the country you'll find villages and towns that are quite literally dying through lack of population. There are schools and hospitals closing because they don't serve a large enough user base, and houses are being sold for £1 in some northern towns to try and get people to stay.

I presume you're not from Scotland or you'd know the problems we have with labour shortages.

As to the eventual peak UK population, I'd expect somewhere between 75 and 80 million - even the higher of which world give us a comparable population density to Japan. Which is a country known for both dense cities and large wild natural spaces.

Yeah, this idea of the UK being full is quite misguided. The amount of land actually occupied by human development is rather small, the majority of our space is farmland and wildland. We simply get the impression that we are occupying almost all the space, due to the fact we spend limited time in these open spaces, only when quickly travelling between urban areas.

I am still not sure you understand the process as well as you suggest. It isn't as simple as you suggest without a complete change to the entire process. How, for instance, do you propose to protect the interest of the party who really matters in all this: The mortgage company?

Also your picture of the conveyancing process is inaccurate generally and reads like something out of a trashy paper reflecting the situation in 1973. Like I said I know it quite well. I lived it for long enough. It is different these days.

If I'm honest, I'd like to see people need to rely on Mortgages less to afford property, or at least have smaller ones. House prices have risen much faster than the average wage, so you're putting yourself into an even higher amount of debt.

The frustrations with the conveyancy process are from my friends and close family who have had very difficult times trying to get a house sale to move at something other than a glacial pace. Chains frequently fall down, multiple times, at significant cost to all parties involved.

I just think the current way our buying/selling market works is out of sync with current day society. People don't have the same job for 40 years, people move around more often than they previously have. That said, what doesn't help is 'market value' also appears to be what you can get for the property if you wait 6 months to a year.

No one has mentioned AirBnB which has moved from letting out a spare room to letting out entire homes. There are 40,000 AirBnB in London which are entire homes, 6,000 in Edinburgh, over 2,000 in Brighton and similar numbers in other major city centres. That is a lot of homes that have been taken out of the normal residential market.

Airbnb can be a major problem for cities. London is probably the worst affected due to the level of tourism and business travellers.

Unfortunately, the product is simply better and cheaper than most hotels, so unless cities start to clamp down on it or work on competitive alternatives, people will continue to use it.

The easy fix would be to look at taxation for hotels vs private rentals. Hotels are usually taxed quite highly, so evening the playing field in that regard could help. Then working with the industry to develop products better for visitors outside of just couples, would help.

Whilst those numbers appear fairly large compared to their populations those numbers aren't that big, Edinburgh for instance would typically house 14,400 people in 6000 homes. This compares to a population of 482,000 (3%).

Even if all those properties had been available in the past (and my guess would be that some of them may be second homes which are now easy to let out when not needed) it wouldn't make a significant impact on the number of available homes for general living.

It depends on the city. Perhaps in Edinburgh the impact isn't too high, although 3% seems more than trivial, looking at the scales we are dealing with.

At the end of the day, short term rentals make much more money than longer term tenants, so the incentive is there for landlords to get rid of existing tenants, or remove the property from the rental market and instead go for the ever so lucrative Airbnb.

Places like Tenerife have resorted to banning this activity, so they can ensure affordable housing (or any housing for that matter) is available for local residents.

 

[bramling]

It goes without saying that you cannot have unending, infinite growth but the UK is far from full. If you travel around the country you'll find villages and towns that are quite literally dying through lack of population. There are schools and hospitals closing because they don't serve a large enough user base, and houses are being sold for £1 in some northern towns to try and get people to stay.

I presume you're not from Scotland or you'd know the problems we have with labour shortages.

As to the eventual peak UK population, I'd expect somewhere between 75 and 80 million - even the higher of which world give us a comparable population density to Japan. Which is a country known for both dense cities and large wild natural spaces.

This is just head-in-sand territory. For starters people like and enjoy open space, I for one don’t wish to see Britain built over.

Secondly we already seem to be running into problems with the existing housing stock. Lots of social housing in poor condition, perhaps bordering on dangerous. Fancy living in a tower block with a single escape stairwell whose fire safety philosophy has been compromised?

Meanwhile these last couple of week have shown us that we also have a problem with properties prone to flooding. For how long can we keep refitting some of these after they suffer a repeat flood? This is probably something which is only going to get worse over time if climate change is real. We already have Fairbourne which is looking like it might be allowed to be reclaimed by nature.

It’s all very well saying there’s places that can take development, but once you’ve ruled out places where development is physically difficult (and presumably a lot of Scotland will fall into that category to some extent), you’re left with places people don’t really want to be, for one reason or another. No problem providing housing in areas where there’s a shortage of well-paid work prospects. The increasing shift to city-based employment is already causing transport overcrowding, and we on this forum should know more than most that providing extra rail capacity is difficult and expensive once the low-lying fruit “quick win” schemes are done.

All this for what? Just so a few people can enjoy freedom of movement?

It saddens me to see the quality of life that my parents generation were able to enjoy relatively easily, yet meanwhile young people today can barely afford a shoebox flat. Thank goodness for Farage.

 

[nlogax]

It saddens me to see the quality of life that my parents generation were able to enjoy relatively easily, yet meanwhile young people today can barely afford a shoebox flat. Thank goodness for Farage.

One day maybe some will finally understand that Farage is just cigarette smoke and mirrors. Leaving the EU has no bearing on changing what you've described. You've been duped.

 

[Bletchleyite]

One day maybe some will finally understand that Farage is just cigarette smoke and mirrors. Leaving the EU has no bearing on changing what you've described. You've been duped.

Quite. Immigration is not the cause of the issues, primarily. The primary cause is more single-person households with more suitable properties not being built - yes, guilty!

 

[najaB]

This is just head-in-sand territory. For starters people like and enjoy open space, I for one don’t wish to see Britain built over.

What percentage of the UK do you believe is currently built on?

Meanwhile these last couple of week have shown us that we also have a problem with properties prone to flooding.

Yes, we do. But this is largely due to:

• Changing land management policies in the uplands meaning that more water is coming down to the lowlands.
• Increased building in the flood plains due to builders wanting to maximise profits by building as cheaply as possible and selling for as much as they can - this can be controlled by the planners

All this for what? Just so a few people can enjoy freedom of movement?

No. So that our economy can function and continue to provide employment for as many people as it reasonably can.

It saddens me to see the quality of life that my parents generation were able to enjoy relatively easily, yet meanwhile young people today can barely afford a shoebox flat. Thank goodness for Farage.

It was at this point that najaB realised he wasn't having a reasoned debate, but rather trying to convert a believer...

 

[RichT54]

Quite. Immigration is not the cause of the issues, primarily. The primary cause is more single-person households with more suitable properties not being built - yes, guilty!

I have heard that this has been an increasing trend over recent years. The road I live in has 35 properties, each having either 2 or 3 bedrooms. At least 8 of the properties have a single occupant (including mine, so also guilty).

 

[Bletchleyite]

I have heard that this has been an increasing trend over recent years. The road I live in has 35 properties, each having either 2 or 3 bedrooms. At least 8 of the properties have a single occupant (including mine, so also guilty).

Indeed it has. So we need more one and two-bedroom flats in tenement type blocks (5 floors at most, say) with decent balconies for outside space (where bedroom two is more a box room with a spare bed and mostly used as an office for those who work from home; these needn't be much bigger than one bedroom properties) - and we need a solution to the problems of leasehold so people aren't put off buying them.

But that isn't as profitable, so the 3 and 4 bedroom executive homes keep going up.

 

[Meerkat]

1) Right to buy as been a disaster, had 4.5m Council houses in 1970s, everyone sold was discounted, and not replaced, so now far too few

The 4.5m homes were sold, not demolished - so makes no difference to the number of homes (in fact it increases the number available to buy.

2) Asset stripping, if public land is sold off, private developers make all the profit selling new homes

If it is sol then clearly the public sector has made some of the profit

3) Need to have massive building programme of standard apartments that remain permanently as cheap rentals.

i do agree with this. Get the investment vehicles with loads of cash to build mid sized blocks of flats to rent. Have a ladder of standards (1-5 stars like hotels? Re soundproofing, response times for faults etc) so people can be confident what they are getting, and have standard terms so no surprises.

And facilitate the pension funds wanting to build loads of retirement homes, so old folk clear vacate of family homes.
Nationalise social care so run down seaside and rural councils actually want to attract old people rather than seeing them as a budget burden.

 

[najaB]

The 4.5m homes were sold, not demolished - so makes no difference to the number of homes (in fact it increases the number available to buy.

Given that the problem isn't a lack of homes, but rather a lack of affordable homes, reducing the supply of quality houses to rent at low prices can hardly have helped.

If it is sol then clearly the public sector has made some of the profit

The issue is that the land was/is sold for significantly less than the houses which are then built on it.

 

[Bletchleyite]

The issue is that the land was/is sold for significantly less than the houses which are then built on it.

Agreed. There was no great issue with selling them per-se if they had been sold for market value, allowing another one to be purchased on the open market to replenish the housing stock for social rental.

 

[underbank]

It goes without saying that you cannot have unending, infinite growth but the UK is far from full. If you travel around the country you'll find villages and towns that are quite literally dying through lack of population. There are schools and hospitals closing because they don't serve a large enough user base, and houses are being sold for £1 in some northern towns to try and get people to stay.

Due, mostly, to all the "good" jobs having been moved to London. Kids go to Uni, and never go back home because there are no jobs in their home areas. We've been doing Uni open days for my son - he's wanting to do the "year in industry" within his degree course. We've looked at Newcastle, Leeds, Durham, etc - all have said most students have to move to London to do their placement year as there are virtually no "local" jobs for them. That's crazy and just shows the London centricity of the country.

We desperately need to get big employers back out into the regions. It's not long ago that you'd have pension/insurance/bank head offices in small northern towns, each employing hundreds/thousands of local people and keeping amenities/services available - now most of that has gone. Places like Kendal are little more than retirement villages for retired staff from Provincial and Provincial. Their children have moved down to London.

 

[Bletchleyite]

Due, mostly, to all the "good" jobs having been moved to London. Kids go to Uni, and never go back home because there are no jobs in their home areas. We've been doing Uni open days for my son - he's wanting to do the "year in industry" within his degree course. We've looked at Newcastle, Leeds, Durham, etc - all have said most students have to move to London to do their placement year as there are virtually no "local" jobs for them. That's crazy and just shows the London centricity of the country.

Yes, that is by far the biggest problem.

While there's already a fair bit out there, we could start by moving all Government offices to the regions - and not Manchester, as that's already becoming London-up-North with house prices to match.

 

[najaB]

We've looked at Newcastle, Leeds, Durham, etc - all have said most students have to move to London to do their placement year as there are virtually no "local" jobs for them. That's crazy and just shows the London centricity of the country.

Indeed it does. And it makes the point that the UK isn't full, just very unbalanced. Stopping free movement will do nothing to solve this (until or unless the economy crashes, that is).

 

[najaB]

While there's already a fair bit out there, we could start by moving all Government offices to the regions

That's probably overdoing things a bit - since there are certain economies of scale to be had by grouping offices closely together - but there definitely is scope to move some staff/functions out of the south east corner.

 

[SteveP29]

It saddens me to see the quality of life that my parents generation were able to enjoy relatively easily, yet meanwhile young people today can barely afford a shoebox flat. Thank goodness for Farage.

You're in for one hell of a shock if you think Farage and leaving the EU is going to alleviate any of the problems the UK housing market/ stock has

Yes, we do. But this is largely due to:

• Increased building in the flood plains due to builders wanting to maximise profits by building as cheaply as possible and selling for as much as they can - this can be controlled by the planners

Add that people keep block paving their gardens, leaving less soil and earth for rainwater to soak into, which runs off onto streets

 

[DarloRich]

If I'm honest, I'd like to see people need to rely on Mortgages less to afford property, or at least have smaller ones. House prices have risen much faster than the average wage, so you're putting yourself into an even higher amount of debt.

So we are back to free houses for all are we? I am more worried about the level of unsecured personal debt people carry. Mortgage debt is long term and manageable through sensible planning. It isnt being offered to you at 18/20/35%+ Mine is at c. less than 2% fixed for 5 years.

The frustrations with the conveyancy process are from my friends and close family who have had very difficult times trying to get a house sale to move at something other than a glacial pace. Chains frequently fall down, multiple times, at significant cost to all parties involved.

This is vastly inaccurate. Chains don't frequently fall down, multiple times. The question you should ask is WHY the chain collapses. Often it is because there is a problem with the house which could be anything from radon gas to windows lacking the correct documentation and everything in between. Generally it is because either the mortgage company doesn't agree with the sellers value or the seller wont offer a discount to cover the cost of rectifying some problem they have created. Looking at you building regs/planning permission...............

I just think the current way our buying/selling market works is out of sync with current day society. People don't have the same job for 40 years, people move around more often than they previously have. That said, what doesn't help is 'market value' also appears to be what you can get for the property if you wait 6 months to a year.

I disagree - your complaint is that you don't want to save and sacrifice and want the reward without the work.

The primary cause is more single-person households with more suitable properties not being built -

Correct, I am guilty. The problem is 1 beds don't offer as much profit for the developers as larger houses

 

[telstarbox]

Indeed it has. So we need more one and two-bedroom flats in tenement type blocks (5 floors at most, say) with decent balconies for outside space (where bedroom two is more a box room with a spare bed and mostly used as an office for those who work from home; these needn't be much bigger than one bedroom properties) - and we need a solution to the problems of leasehold so people aren't put off buying them.

But that isn't as profitable, so the 3 and 4 bedroom executive homes keep going up.

London already has minimum space standards for rooms and 'private outdoor space' (which is either a balcony or a garden).

 

[Bletchleyite]

That's probably overdoing things a bit - since there are certain economies of scale to be had by grouping offices closely together - but there definitely is scope to move some staff/functions out of the south east corner.

To some extent yes, but when you consider the value of the properties that can be flogged off...

 

[Bletchleyite]

London already has minimum space standards for rooms and 'private outdoor space' (which is either a balcony or a garden).

Good-sized balconies, though? Most that I've seen barely have room for a small table and two chairs. And conversions don't have that (shared space doesn't really count). And most of the flats in other towns don't - when I looked to buy (admittedly 10 years ago) I was first looking for a flat (small-block, with balcony) but there were simply none in MK that suited. There are a few now but still not many.

 

[Bantamzen]

The OP wonders about people's say on the housing issue. My thoughts are simple, most housing is too expensive & is becoming more so at a rate higher than most people can keep up with. This is evidenced in the fact that the average age of the first time buyer is getting older. Sooner or later the number of people coming in at the bottom of the housing ladder, and the capital available to BTLers will run out, and something will have to give. I wouldn't want to be depending on capital locked into property when that happens.

 

[underbank]

The problem is 1 beds don't offer as much profit for the developers as larger houses

Yet look at all the new student accommodation blocks in virtually every university town/city. All one beds, often clustered around communal kitchens, etc. They must be very attractive to developers/investors, so why not for the residential market? Maybe that kind of thing is the way forward - i.e. university style rooms for single workers/low income workers rather than single people paying through the nose for 1/2 bed basement or attic flat conversions?

 

[Bletchleyite]

Yet look at all the new student accommodation blocks in virtually every university town/city. All one beds, often clustered around communal kitchens, etc. They must be very attractive to developers/investors, so why not for the residential market? Maybe that kind of thing is the way forward - i.e. university style rooms for single workers/low income workers rather than single people paying through the nose for 1/2 bed basement or attic flat conversions?

I have wondered about companies "building to let" student type accommodation for young professionals rather than students. I'm sure there would be a market, particularly in London, and I think it exists on a fairly small scale.

This kind of accommodation is more space-efficient (and so more profitable) than one-bed flats, FWIW, because of shared kitchens etc.

When I first moved down South for my job just out of university I'd have considered it.

 

[Bletchleyite]

The OP wonders about people's say on the housing issue. My thoughts are simple, most housing is too expensive & is becoming more so at a rate higher than most people can keep up with. This is evidenced in the fact that the average age of the first time buyer is getting older. Sooner or later the number of people coming in at the bottom of the housing ladder, and the capital available to BTLers will run out, and something will have to give. I wouldn't want to be depending on capital locked into property when that happens.

You mean another crash? Won't happen unless political intervention pushes interest rates to unsustainable levels - that was what happened in the 80s. What will happen is a stagnation of prices, which will then reduce a bit in real terms due to inflation. This won't cause a bubble to burst.

I think this would realistically be the best thing that could happen to the market - returning affordability without bankrupting anyone. And it could be encouraged to happen by building more houses.

 

[bramling]

One day maybe some will finally understand that Farage is just cigarette smoke and mirrors. Leaving the EU has no bearing on changing what you've described. You've been duped.

Farage raised the salience of anti-EU feeling to the extent that a major party took up the issue, ultimately leading to the referendum and its result. For that I'm grateful.

As to being duped, there's already encouraging signs of a rather more hardline immigration policy, one based on pragmatic requirements rather than constrained by an ideology drawn up many decades ago. Naturally time will tell is Boris's government follows this through to full-scale delivery and implementation, but the early signs are encouraging.

 

[bramling]

You mean another crash? Won't happen unless political intervention pushes interest rates to unsustainable levels - that was what happened in the 80s. What will happen is a stagnation of prices, which will then reduce a bit in real terms due to inflation. This won't cause a bubble to burst.

I think this would realistically be the best thing that could happen to the market - returning affordability without bankrupting anyone. And it could be encouraged to happen by building more houses.

There's been talk of slowdowns and bubbles bursting for as long as I can remember. Thusfar it hasn't really happened, especially in the London / South-east area.

 

[bramling]

So we are back to free houses for all are we? I am more worried about the level of unsecured personal debt people carry. Mortgage debt is long term and manageable through sensible planning. It isnt being offered to you at 18/20/35%+ Mine is at c. less than 2% fixed for 5 years.

This is a very good point. At work I'm frequently shocked to hear how much debt people carry, and this includes people on good salaries (i.e. well above average).

 

[Meerkat]

Indeed it does. And it makes the point that the UK isn't full, just very unbalanced. Stopping free movement will do nothing to solve this (until or unless the economy crashes, that is).

Immigrants have far weaker geographical inertia - they are even more likely to gravitate to London than young people in the north.
Modern economies are based around scale and agglomeration effects. You move a big office to anywhere other than big cities and you have skill shortages. Not sure there are that many big government offices left in London that could be moved anyway.

 

[nlogax]

Farage raised the salience of anti-EU feeling to the extent that a major party took up the issue, ultimately leading to the referendum and its result. For that I'm grateful.

As to being duped, there's already encouraging signs of a rather more hardline immigration policy, one based on pragmatic requirements rather than constrained by an ideology drawn up many decades ago. Naturally time will tell is Boris's government follows this through to full-scale delivery and implementation, but the early signs are encouraging.

What have any of these things got to do with the housing supply shortage?

Clue; nothing.

 

[najaB]

Immigrants have far weaker geographical inertia - they are even more likely to gravitate to London than young people in the north.

Conversely, they are more likely to take up available posts in places other than London - if there were any.

 

[telstarbox]

I have wondered about companies "building to let" student type accommodation for young professionals rather than students. I'm sure there would be a market, particularly in London, and I think it exists on a fairly small scale.

This kind of accommodation is more space-efficient (and so more profitable) than one-bed flats, FWIW, because of shared kitchens etc.

When I first moved down South for my job just out of university I'd have considered it.

The Collective sounds like that and there may be others. https://www.thecollective.com/

There are also an increasing number of 'managed' flat schemes such as Fizzy Living where your contract is with the building owner rather than a 'small' buy to let landlord.
https://www.fizzylewisham.com/