A rising population and a rising single family unit population has driven house prices and rental prices relative upwards. This graph shows that single households represent a larger portion of the population than family units-thus increasing demand for homes.
This graph demonstrates that as the UK population has grown-house production has slowed from400 000 house completions in 1970 to 150 000 in 2010.
Adiminishing housing stock meaning less homes are being built per capita, this means as the population has increased the amount of housings following the population arm has not kept pace but actually decreased.
According the Office of National Statistics the UK population in 2013 was 60million.
Graph 2 above shows that since 1970 when the population was 50 million house production was at 400 000 completed units per annum.
45 years later the population has increased to 60million or a 16.5% increase.
But houseproduction has fell year on year from 400 000 units in 1970 to less than 150 000 completions per annum in 2013.
In relative terms it should have increased to 466 000 homes completed per annum.
Even if a steep discount is applied to these numbers to accommodate margins of error we are only from the above gathered data producing 32% of what we should year on year to accommodate the shortfall.
Additionally pressures on housing stock and pricing.
An increasing population of aged pensioners called over 65s has a higher extended life span -this has created less vacancies as people are living longer and staying longer in properties.
Large migrations from Europe and the World into the UK from workers and their families all require long term accommodation. Large transient and global orientated workforces arrive on relatively shorter notice than a gentle population curve creating immediate demands on already short supplies-further driving up prices. Social erosion has created more single parent families. Thus all these additional pressures on an already slow housing production has resulted in a generation that cannot afford the purchase of new home to start their lives.
The UK Governments response.
The UK government has been monitoring and tackling these problems, diagnosing and studying with a responsive and immediate actions available if necessary. Much of the above problems are not repairable with this short term action rather macro national solutions are needed.
The Chancellor and Deputy Prime Minister set up a Review on 9 April 2003 with the following Terms of Reference:
1. To Conduct a review of issues underlying the lack of supply and responsiveness of housing in the UK, and In particular to consider:
2. The role of competition, capacity, technology and finance of the housebuilding industry; and
3. The interaction of these factors with the planning system and the Government’s sustainable development objectives.
What followed in response to this request was the commission of the Barker review,the Barker review sought a ground up approach,and stripped away many issues to arrive at a diagnosis of the problems ,this was hewn from multiple sectors of the population, industry and commerce , it was highly comprehensive and the government used it to make decisions about the residential property market in particular – this is considered a major turning point to establishing multi-tiered solutions to this problem.
Problems Barker Review detected:
• A restrained, limited supply of housing fosters national economic instability and retards labour market growth, the UK should therefore have a more fluid housing market
• For a large portion of the population housing has become increasingly unaffordable, the dream of home ownership is as alive as ever, yet the reality is that this dream will never be realised unless the trend in house prices is reduced.
• This brings with it the potential for widening the gap between those that can and those that cannot access market housing, rising numbers in temporary housing is evidence of this widening phenomenon today.
• Homes are more than a refuge and shelter, they are a gateway to communities and services, housing also plays a major part in the balance sheet of a home and in the future financial planning.
• The housing market indicates people choice of housing type, location and establishes that as peoples incomes increase their preference for space does to.
• Increasing housing supply raises questions about the loss and impact of open spaces, these considerations pose a number of questions for decision makers at all levels.
In December 2005 the government published their response to Kate Barkers report.Some of the key responses that were adopted were increasedinfrastructure, an overhauled simple planning system to approve more homes, environmentalstability and well planned environments to aid and asset the housing market.