The Housing Market Crisis – What Have They Missed?

There was an article on the Guardian website “How do we tackle the housing market crisis? By the experts” that intrigued me. I studied it thoroughly, and came to the conclusion that it was fundamentally flawed. We’ll get round to why I think that a bit later.

For as long as I can remember, the UK has had a housing crisis, and it is a source of constant wonderment to see that nobody has found a way of solving the problem. If you read through the article, you may come to the same conclusions as I did.

The “experts” they refer to represent different aspects of the housing market, viz.
mortgages, estate agent, charity (Shelter), landlord, rate setter, and housing professional.

The following statement is clear enough – “The basic problem is the imbalance between supply and demand.” – which is true of many things, not just housing. However, the supporting discussion relates only to the “Supply”, of housing, and totally ignores the “Demand”, and the factors affecting it.

Now I think it is safe to say that you cannot solve a problem if you only try to fix one part of it. But this is in effect what they have been doing for years, and it obviously doesn’t work. The rate they are going they will have eventually covered the whole of the UK with houses, asphalt (and potholes), and there will still be a housing crisis!

The Demand side must be addressed too!

What factors govern demand? I can certainly think of a few:-

    1. Birthrate
    2. Deathrate
    3. Immigrants
    4. Immigration.

Birthrate is not as simple as it seems, for although there is a tendency towards fewer offspring in the indigenous population, the immigrant populations still maintain a higher birthrate. This has caused problems in some areas where hospital beds for delivery have not been available in sufficient supply.

Deathrate tends to reduce with improving healthcare, but will healthcare continue to improve? The NHS appears to be suffering from overload at the moment, and resistance to antibiotics, and extreme weather events, could change the picture rather radically.

Immigrants (3) are those migrants that have already established families, and are the ones responsible for the increasing birthrate.

Immigration (4) are the new arrivals. With an annual influx of over 200,000, if we assume 4 persons to a household, we will need 50,000 new houses as a result.

According to the housing professional, “We can only tackle this by building more homes – in England we need to build 250,000 a year just to keep pace with our population. We’re achieving less than half that, with just 112,630 homes built in the year to March 2014.”

My question here is “Does this include houses for the new immigrants, or not?”

I think you can see where I am going with this by now. The government glibly talks of immigration ‘helping the economy’, but forgets to mention the ramifications that will be felt for years to come. Perhaps they don’t understand the problem themselves?

If you don’t mind seeing “England’s green and pleasant land” being transformed into one big urban wasteland, relax, sit back, and do nothing.

If however, you place value on your Green Belt, and don’t want to see it swallowed up by new housing estates, start talking to your political representatives.

The Conservatives are unlikely to be of help, see:- Theresa May waters down Tory migration target

If you can’t find a sympathetic ear, talk to UKIP!

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One thought on “The Housing Market Crisis – What Have They Missed?”

  1. Yes, the predictions for population growth include predicted immigration levels. However, I think immigration is a much smaller problem than empty and unfit housing, and the ridiculous house prices at the moment, which are feeding each other. When my parents bought their house, they could borrow up to two and a half times their combined salary. Nearly thirty years later, thanks to Thatcher removing the limits on borrowing, that wouldn’t let them live in this area. It’s done wonders for the baby boomers and their offspring, who now have enormous equity – often including a rental property. For newcomers to the market, though, immigrants and millennials alike, we’re faced with low wages and impossibly high house prices. This means that we’re staying with our parents and not getting onto the housing ladder, so there’s no point building starter homes because no one can buy them. Instead, there’s a lot of what used to be second-rung homes, big enough for a young family, because people are having to come onto the market as couples and with a few years of career behind them.
    Immigration is good for the country, but greed is not. What we need now is for the cap on borrowing to be restored, to bring house prices back in line with what people can actually afford, and more regeneration of urban areas, mostly in the North, that have been left behind and now have large amounts of empty property because there’s no jobs there with which to buy or rent.

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