How many new homes do we really need to solve the housing crisis?
According to an interesting piece by Evan Owen-Powell on the Secret Surveyor blog – it’s a complete red herring.
Secret Surveyor argues that Britain is not short of homes, but uses its existing stock very inefficiently.
Politicians have settled on supply as the main problem, the blog argues. And they interpret supply as the number of new homes being built: “Hence the fixation on Cameron’s recent pledge to build 200,000 starter homes by 2020 (by which time the population is projected to have grown by at least by another 2,000,000).
“But most housing supply is actually provided by houses that are already built.
“There are about 100,000 housing transactions a month, and currently about 1,200,000 housing transactions a year, down from the historically normal 1,600,000 annually; and only 10% of these are new-builds.
“Cameron wants to provide 200,000 starter homes by 2020. This would be an extra 40,000 homes annually for sale.
“So he wants to increase the number of homes for sale every year by from a current 1,200,000 to 1,240,000, or an increase of just 3% of the supply.
“Will that really make that much of a difference, given houses are currently rising by 10% a year?
“No. It is neither here nor there.”
But what of those plans to build 200,000 starter homes for first-time buyers to buy at a discount?
Secret Surveyor says this would help about 16% of first-timers, while making things worse for the other 84%.
It’s an interesting piece which challenges some common perceptions.
It’s just a shame that the blog comes labelled with a glowing testimonial from Nick Clegg (who he? – Ed) who says it is “without doubt” the property blog that he reads every day on the internet.
Every day? The last blog before this was on March 24!
Comments (5)
Anyone who thinks more houses won’t have a significant impact on the state of the industry shouldn’t be allowed to blog about it! Supply and Demand, people! I learned it when I was 15yrs old and it explains so much, so easily.
This is a surveyor? Glad he does not practice in my area.
Does somebody want to take him through the very first class in economics, Supply & Demand?
Anyone can call themselves a surveyor perhaps he is Mr Cleggs mate!
I used to think a bit like that but it simply isn’t true – we need more houses.
The way the blog reads almost seems that the most important part of the housing market is the actual number of transactions (because all estate agents/ surveyors/ the government earn off them??? not sure if that was the point but it felt like it).
The most important aspect of the housing market is that there are roughly enough properties available for the people to live in. There is a huge shortfall in this regard – the number of 20-somethings living at home at the moment is very worrying.
The fact that people are hesitant to put their properties on the market at the moment has absolutely nothing to do with the demand for somewhere to live. It has to do with the need to change where I live.
Believe what you want. We could become a communist state who tell its citizen what size house they live in but thank goodness at present we are not! The areticle on this blog is not convincing.