12 Dec 12.12.2017 How to solve the UK housing crisis
12.12.2017 How to solve the UK housing crisis
These and many other factors indicate the need for increasing housing supply. In order to meet the underlying growth of housing demand the government needs to build 300,000 houses per year. This figure has never been achieved during the last 4 decades, and in the last 10 years new construction has been around half that figure.
Since the supply does not increase in line with underlying demand, house prices in the UK keep rising. Since 1990 house prices have more than doubled, consequently unaffordability of house purchases led to the rise of ‘generation rent’. While some politically popular schemes, like “Help to Buy”, benefit some individuals they are aggravating problems for everyone else.
Therefore, the only good answer to the UK housing crisis is building more new homes. John Kay, one of Britain’s leading economists, claims that no matter who finances those new houses, who buys them or where they are located, expanding construction, the occupancy and utilisation of the existing stock will adjust the supply and demand resolving the UK housing crisis. John Kay also mentioned that migration of EU workers is extremely important for UK property market, as they are a source of much of the labor required for a new ‘householding boom’.