According to a survey published at the end of June, 70% of people aged between 25 and 34 consider getting on the property ladder one of the biggest problems facing young people today. Indeed, of this younger generation, 48% of those who are not homeowners want to buy a property in the next 10 years. However, two-fifths (41%) do not think this dream will materialise. The respondents claim that the biggest barriers preventing them from getting on the housing ladder are raising a deposit (76%), access to a mortgage (46%) and the affordability of mortgage payments (43%).
Despite the huge value of the UK real estate sector – not to mention its vital contribution to the nation’s GDP – headlines about the housing crisis continue to emerge. And the majority of people are now acutely aware that – as a result of housing being in short supply – demand is driving prices up.
But how can the government and the property industry effectively tackle the issue of supply versus demand and – in turn – make it easier for people to get on or move up the property ladder?
Look beyond new builds
It goes without saying that building more new homes is going to be central to any successful strategy for improving the UK’s housing supply. Indeed, the government has pledged to build 300,000 homes every year by the mid-2020s.
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However, these new-build targets – whether they are met or not – must be complemented with more creative measures to ensure there are more properties available for first-time buyers to purchase.
The government has already made positive progress in this respect. Earlier this year, it introduced changes to planning permission legislation to allow businesses and homeowners in built-up inner-city areas to extend the property upwards by two storeys. This – in turn – should see more flats become available on the market, and in desirable urban areas.
Refurbishing rundown properties
But there are other ideas that must be explored. For example, Theresa May et al ought to consider how they can encourage the refurbishment of derelict and rundown properties. Figures show that there are over 216,000 homes across the UK that have been empty for the past six months or more, with more than 11,000 of these sitting abandoned for at least 10 years.
Local councils must do more to return these empty properties to the housing market, and this could involve working with property investors and developers to help refurbish those that are in poor condition. Doing so could provide a much quicker and more cost effective way of boosting housing supply.
Supporting SME developers
If the UK is to develop enough new homes to satisfy the ever-increasing demand for property, it will be essential that all potential construction firms are given opportunities to proceed with potential projects. In particular, small- and medium-sized developers will require support so they can contribute to the production of houses, flats and residential complexes.
A survey by the Federation of Master Builders found that 54% of SME developers find accessing funds a major barrier preventing them from building more homes.
It is important that SME developers are educated about the alternative finance options – such as bridging loans – that can help them overcome this challenge. In fact, the Association of Short Term Lenders announced that 93% of its members believe that short-term finance is ideally positioned to support SME housebuilders in the future.
Solving the housing crisis is going to take a huge amount of work from both the private and public sector. But it is vital that – along with a lot of hard work – the government and industry bodies demonstrate a willingness to promote creative solutions to get more properties on the market, and more people buying houses and flats.