The Daily Mail has reported in one article that house prices are still rising as much as £5 an hour in some parts of Britain, including the capital, whilst a number of affordable homes has almost halved in a year, a recent study has revealed. According to the Land Registry, who carried out an analysis on the property market, these increases are leaving first-time buyers in turmoil. Many are already struggling to save money for deposits, and they have also been met with strict lending rules imposed by banks and building societies. The result of house prices rising by £5 an hour is based on a calculation of prices in London rising by £43,795 divided by 365 days in a usual year.
This house pricing crisis hasn’t helped homes for sale, either. Reports by credit agency Experian has stated that the number of homes up for sale has dipped to the lowest its been in 4 years. The number of affordable homes in London has also taken a dive, where homes priced between £100,000 and £250,000 dropped by 52% during July to September this year.
Andy Wills, who works as a data director at Experian, said: ”First-time buyers and second-time buyers, particularly those with growing families are likely to be most affected by the shortage of affordable homes.” It has been already highlighted that many families have been forced out of the capital due to price hikes in the housing crisis, and the story seems to be just as bleak for those who want a home of their own.
Jonathan Stephens, who carried out the analysis for the data for Land Registry, stated: ”There’s a lack of physical space for new build properties and those that are being built cannot keep up with the rate at which they are being demanded. Nor is the issue likely to go away soon. In fact,” he added, ”with the huge growth in the UK’s population, the situation is set to be exacerbated further still.” Even though London is a thriving capital, the property market is situated by the unequal balance of supply and demand.
The government has pledged to tackle the growing demand for homes in an initiative it had announced earlier this year, called Starter Home. It promises to build 200,000 new homes for first-time buyers by the year 2020. These homes will be offered at a 20% discount, which can happen as the government is offering the developers the chance to build on brownfield commercial land and are waiving taxes. This initiative will be rolled out to buyers under the age of 40, who will be able to register from next year.
Experts have been skeptical about this scheme, and have suggested that there is no chance the the government’s pledge of 200,000 new homes will be reached. Ray Boulger, a mortgage broker, commented: ”Even if they get started now on building these homes, they are never going to reach the deadline. There are simply too many things to work through, such as they are building these properties on brownfield sites, which means the sites need decontaminating.” Time will tell if the government’s promise will actually become a reality.