Government should build more homes to solve shortage

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by Kay Murchie

The National Housing and Planning Advice Unit (NHPAU) said by 2016 the country would need 270,000 new homes a year, rather than the Government’s current 240,000 target.

The NHPAU is an independent body set up to advise the Government and remarked that the current level of building would lead to housing affordability deteriorating further, with the cost of the average home reaching 10 times earnings by 2026, compared to 7 times earnings currently.

The independent body added that the current aim of building 3 million new homes will not resolve problems for many first-time buyers in the face of what are expected to be continually rising prices.

Furthermore, the right type of homes must be built in the right place. Building smaller flat-style 2-bedroom homes rather than 4-bedroom family homes would lead to housing affordability worsening.

Professor Stephen Nickell of the NHPAU, commented that England is a prosperous and growing nation. If we don’t act, a generation of buyers will be unable to get a step on the property ladder. In addition, current homeowners will not be able to move on to bigger and better homes.

In spite of the quantity of homes built increasing from 130,000 in 2001 to 185,000 in 2005, according to the Land Registry the cost of the average home has risen by 63% from £98,342, in December 2001, to £160,620, in December 2005.

The cost of the average home reached £183,896 according to Land Registry figures for September 2007.

The NHPAU concluded by saying even if a predicted slowdown in the property market took place and the real value of property failed to rise for the next 3 years, the average house price would be 9 times earnings by 2026.

It was recently suggested that Britain’s population will increase to 70 million by 2028, together with the lack of housing, it is likely that that more people will turn to the rental sector in future.