Recent research commissioned by the National Housing Federation (NHF) suggests that the proportion of home ownership in England could decline further from its current rate of 67% to 63.8% over the next decade.
Despite the government’s plans to release thousands of acres of public land for house building, and its pledge to invest £4.5bn in affordable homes, the NHF argues that this isn’t enough and the housing market could be plunged into crisis.
Whilst developers are keen to build new homes, some are concerned that they will not be able to sell them due to buyer’s affordability constraints. If builders become left with excess housing stock it may damage the house building industry and the trades it supports, it could also have a negative impact on the housing market.
Although the NHF’s research has caught headlines, perhaps the best approach is to err on the side of caution. The government are already looking at ways to make housing more affordable for key groups. For example, the £250m FirstBuy initiative is designed to help up to 10,000 people purchase new-build properties. Maybe, the best approach in today’s economic environment is to wait and see how popular and successful schemes such as this are, before constructing 100,000s of extra new homes which could ultimately be left un-sold.