A new report by The Home Builders Federation (HBF) has declared that England is the worst place in the developed world to find housing, with a greater proportion of people in England living in substandard properties compared to the European Union’s average.
This comes as 42% of Brits say their biggest anxiety is that they will be stuck renting for the rest of their lives, according to new research from Cornerstone Tax – the UK’s leading property tax experts. In light of this news, David Hannah, Group Chairman of Cornerstone Tax, discusses the current state of the property market.
Further findings from the HBF found that England has the lowest percentage of vacant homes per capita in the Organisation for Economic Co-operation and Development (OECD), a group of 38 nations, including most of the EU, the US, Japan, and Australia.
This can be largely attributed to two decades of failed pledges from previous governments to build more homes. According to the government’s Affordable Homes Programme, 9,000 fewer houses were built in 2016 than planned. By 2021, government figures show that this has increased to 32,000 homes.
As a result, it is estimated that 340,000 new homes must be built annually to meet the current demand, as the past pledges of 300,000 new homes being built each year by the mid-2020s have fallen short.
Renters are also feeling the pressure from the lack of new affordable homes in the UK. The lack of supply and increase in demand for properties have led to a quarter of private renters in the UK being “overburdened” by housing costs – spending more than 40% of their income on rent, compared with just 9% in France and 5% in Germany, according to OECD data.
The reason for the high costs of rent, Hannah believes, is that the government changing its building pledges, coupled with the increase in government red tape on rental properties, has caused a mass exodus of landlords from the rental market – a time when landlords could offer the government welcomed relief in providing homes for its citizens.
David Hannah, Group Chairman at Cornerstone Tax, said, “We are currently experiencing a chronic undersupply of housing in the UK due to the failed promises year on year by government’s past and present to build new homes. A continuation of this will mean that housing will become even more unaffordable. This comes amidst the fluctuation of mortgage rates, and now, first-time buyers will likely need help from family finding an available property whichthey can afford – if they are fortunate enough to have that financial support.
“We have now reached a point where the market is so strained from lack of stock – those renting or looking to rent are entering a highly competitive market, as many are willing to compete and outbid on rent prices. This is turning into a dire situation which requires urgent intervention from the government to ease the pressures which people are facing across the country.”
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