We’re often told that the housing market is broken. But exactly HOW is it broken? Here at Property Insider we thought we’d offer our own thoughts on what’s wrong with the UK housing market right now:
* Interest rates have been dropped so low, to prop up the economy. It’s created a false boom in the housing market that doesn’t really exist.
* Developers are mostly only building the houses that they can sell easily and make the most money on – normally 3-4 bed ‘executive’ type homes in good locations. What about the rest of the market?
* There’s a huge demand for affordable housing …. but no one can afford to build affordable housing. Affordable housing is the ultimate oxymoron.
* Mortgage lending policy is a bit of a mess. Is there even a policy? Lenders have been either throwing money at borrowers willy-nilly, or sitting tight on it. The less you need to borrow for a house the more you can have, and vice versa.
* The balance between incomes and house prices is all wrong. And it’s only going in one direction …. the opposite direction.
* First time buyers are the very definition of the term ‘property ladder’. They’ve have underpinned the housing market since the 1960s. Today, not enough first time buyers can afford to buy.
That’s assuming, of course, they actually DO want to buy, which shouldn’t be taken as a given.
* Property has been promoted as an investment, but not enough extra ‘product’ has been added into the market to cater for both investment buyers and home buyers to co-exist.
* Everybody wants to live in a nice area. But the people who already live in nice areas don’t want anybody else to live there.
* Everybody wants to live in a nice area. But nice areas are unaffordable, partly by virtue of the demand. Nobody wants to live in a cheap, affordable area because they’re perceived as not so nice.
* The costs of building a house are huge, partly due to antiquated construction practices. Cars aren’t built the same way they were 50 years ago, so why are houses?
* There hasn’t been a coherent housing policy for years, and years …. and years. Governments have never done anything about it because they know it doesn’t win votes.
Booming house prices and cheap finance on the other hand DO win votes.
Here at Property Insider we think these problems offer some food for thought and maybe contribute towards finding a solution. But we don’t claim to have all the answers. So feel free to drop up an email at firstname.lastname@example.org and let us know what you think. Are we right or wrong? What else is wrong with the housing market right now?