Quick Fix for the UK’s housing market?
With the UK’s population continuously growing and with major cities such as London becoming overpopulated, the UK’s housing market is in a sticky situation. It is clear something major needs to be done, but what? Well a few people believe they have the answer and some ideas do seem promising.
The mayor of London , Sadiq Khan has begun to focus on ‘factory built homes’. These homes are constructed and can be shipped throughout the UK on the back of a truck making them extremely accessible. Sadiq Khan has recently secured a loan to build around 1,000 factory built homes by 2021! Whilst these homes are affordable and convenient they do have their drawbacks. The main one being that at 38 square feet the homes are about the size of Crispy’s, not really ideal for a family setting. But recent trends have seen people downsizing in general just because large houses cost more to purchase and maintain.
Another potential solution is that we follow the American system and focus more on building properties solely to rent out, never to buy. This potential fix would reduce building costs and remove letting agency fees. However, many people are not keen on pursuing rental properties as they believe that renting property is the same as chucking money down the drain. People are also sceptical because they like the idea of being homeowners.
One idea which has been around for a while is the introduction of rent controls. Rent controls have been implemented in other cities around the world such as Berlin and the overall results have been very positive. However, the majority of economists oppose rental controls as they rightfully call them out for being inefficient. For example, if a price cap was put on London housing then there would be less and less incentive for landlords to rent out their properties and the amount of houses being supplied to the market would fall dramatically. For this reason, among others, the conservatives have ruled out rental controls for now as they look to exhaust all other possible solutions.
Whilst the ideas currently being bounced around in the political sphere do seem fairly promising it is clear that these measures are just the beginning of a long process to get the UK housing market back on track. It’s still pretty certain that you’ll have to pay top dollar to live in central London for the foreseeable future, so you may as well stay in Leeds!