Press Release Summary: Affordability has been one of the big watchwords of the UK housing market in recent times. It has been so because increasing prices have left more and more people either unable to get on the housing ladder or severely stretched when they do so.
Press Release Body: Affordability has been one of the big watchwords of the UK housing market in recent times. It has been so because increasing prices have left more and more people either unable to get on the housing ladder or severely stretched when they do so. It has also been so because the buy-to-let market has been able to provide a greater supply of rental homes to those in such a situation, which in turn has enabled the landlords to increase their portfolios due to rising demand.
The issue has, naturally enough, attracted the attention of politicians as the matter has become one of hot debate among the parties. The Conservatives have proposed axing stamp duty for first-time home buyers on any home valued at less than £250,000. The government, meanwhile, has just unveiled proposals to allow councils to set up Local Housing Companies, public-private partnerships which will see the councils have a say in how land sold for housing development is used. The intended result will be more homes set aside at affordable prices for first-time buyers, key workers and those with families.
Announcing this scheme, housing minister Yvette Cooper said: \"This is a new way to help councils to do their bit to support new homes for key workers and families in their areas.\"
The department of Communities and Local Government said 14 local authorities had expressed an interest, these mainly being large areas of population outside London, including the likes of Manchester, Leeds, Newcastle, Nottingham and Bristol. However successful the scheme is, broader issues of affordability may remain through the country, not least as issues of supply shortages are present throughout the country. This is especially true of London and the home counties, none of the 14 boroughs being from the capital and just three from the home counties.
In fact, the broader issue of affordability, being linked to supply and with the housing market so inflated, is at a point where there is a \"hell of a long way to go\", according to Paul Holmes, chief operating officer of first-time buyer website Firstrung.
Mr Holmes said he believed the housing market had peaked and was heading for a correction, but noted that this year the average price of a house bought by a first-time buyer (£168,000) was seven times that of the average buyer\'s salary (£25,000). In order to bring it back to a more manageable four times, this would require a 50 per cent adjustment, \"which isn\'t going to happen\", he stated.
Affordability will, in the view of Mr Holmes, improve with the end of cheap credit caused by the recent credit crunch, which he said has ended the push to \"insane heights\" that the market reached. But with such a long way to go it could be that the affordability issue, whatever can be achieved on the ground in some local schemes, will be around for a long time yet, with significant implications for demand in the buy-to-let market.
2022
