Housing solutions proposed in the election manifestos need to be all encompassing and embrace every part of the property market according to a leading property management firm. Apropos by D.J. Alexander believes that to ensure the housing sector becomes more equitable and delivers homes to people where and when they need them then future policy must encompass and include social housing, private rented sector (PRS), and owner occupier.
The recent report, ‘Inequality street: Housing and the 2019 general election’, by the Resolution Foundation stated that housing has become a central political issue because of low home ownership, particularly among young adults, higher levels of housing costs with cuts to housing benefit hitting those renting on lower incomes, and low interest rates benefitting higher-income mortgagors which has increased overall inequality in the process.
Their solutions to the problem are to: “Use the tax system to rebalance housing demand in favour of those struggling to enter home ownership; build more homes in areas of high housing demand; increase grant funding for the building of more social homes; re-peg housing benefit to local rent levels; and monitor closely the impact of increasing rents in the social rented sector.”
David Alexander, joint managing director of apropos by D.J. Alexander, explained: “Few would argue that there is an immediate need for more social housing across the UK but specifically targeted in the areas of greatest need. But this is a policy which needs to be developed in conjunction with the PRS and the owner-occupied sector so that all three complement one another rather than be at odds. Too often the PRS is cited as the cause of the current housing problems rather than one of the solutions. The reason that there is a shortage of homes is due to multiple reasons including the reduction in the provision of social housing over the last 30 years; greater financial restrictions on lending for mortgages following the property crash of 2008; and the rising population.”
“Solutions to the issues facing the housing sector often solely blame the PRS as the cause of problems in the market and only see a proposed increase in social housing and the easing of borrowing conditions for home ownership as the solution. The truth is that even building 100,000 new social housing homes a year will not resolve the housing shortage. The UK population is forecast to grow by over 300,000 a year for the next 15 years so demand for rented accommodation will far outstrip supply and it is only through more social housing and increased growth in the PRS that this demand can be met.”
David continued: “Equally easing lending rules to enable many younger people to buy homes may lead to similar problems experienced in 2007-2010 when many people simply overstretched themselves leading to long term financial issues.”
“There is also, at its heart, behind many of these recommendations the view that everyone wants to buy a home rather than rent when the reality is changing, particularly amongst the young and, to a lesser extent, the older communities. A recent report by CMS entitled ‘Urban Being – the Future of City Living and the European Beds Sector’ found that 40% of 18 to 24-year olds said they would like to rent long term. They liked the idea behind build-to-rent developments which had all inclusive packages for tenants including internet, utilities, cleaning and council tax combined in one monthly fee. A further finding was that for 76% of 18 to 24-year olds in Glasgow owning a home is not a priority. While the older generation is more drawn toward home owning 45% of real estate respondents in the survey indicated retirement living was the sector with the most potential for growth over the next five years where the product is aspirational, and better tailored to the needs of an older demographic.”
David concluded: “The problem with many of the solutions to the current housing situation in the UK is that too often a one size fits all approach is used. Housing is the area where there needs to be as broad a response as possible to match the widely different needs of communities due to their demographic, their geographic and their social requirements. What appeals to one group in one part of the country would be completely unsuitable elsewhere. I believe that all parties should include in their manifestos a requirement for social housing, the PRS and owner occupiers to work together in offering as wide a range of homes as possible and to create an environment where each group (PRS, social housing and owners) is equally valued, and their views respected, understood and responded to. Make no mistake whichever party wins the election they will need to be as open and flexible as possible in their approach to providing homes for people to ensure that the market remains buoyant, fair and trustworthy as the growth of housing market continues.”