The Truth Behind a Rise in Affordable Housing in England
According to Theguardian.com, it seems that the housing situation in England has improved in favour of the middle class population. But is it really like that?
In 2014-2015 66,000 of new houses were built, which are said to be affordable. That is a 55% rise compared to the previous years. But on the other hand, the availability of low-rent social housing properties has fallen by 12% to the lowest levels seen between years 2013-2014. The question now is, whether the newly built houses will be affordable to people with an ordinary income, or not.
Green Party member, Darren Johnson, is quite sceptical about the housing situation in England. He said that the positive figures are hiding the fact that houses are less affordable than they were 10 years ago. According to him, the positive numbers are arising from a four-year programme that was completed in only a year. But in reality, the rate of affordable housing has been too low over the past five years.
Rising House Prices
According to marketoracle.co.uk the prices of houses will increase, so it is a good idea to buy a house now instead of waiting until it gets cheaper, because it won’t. The problem in UK is that the demand for houses is rising thanks to a recent baby boom and immigration. The only solution according to marketoracle.co.uk is to increase the construction of new houses to 400,000 per year, which is just impossible to happen, as it would mean building an entirely new town. The economic growth is surprisingly against the lowering of affordable housing in UK, as the country is getting more attractive for new immigrants, and therefore the housing demand is still rising.
British Household Debt
The British economy is experiencing a boost right now and has been growing the fastest compared to the other world leading economies. Such an economic situation is making a positive impact on the people’s economic behaviour. One of which is borrowing money from banks. Before 2008, the household debts peaked to 160% – making it the highest within the last decade. Since that time, it has been declining. Now the number of mortgages is rising again, but in a more positive way. The people borrowing money are those who are really able to pay down the debt.
Despite the high cost housing, Britain’s balance sheet looks quite healthy. That is caused by people being unsure about the economy and they would rather pay down their debts than take out a new loan.
The British interests rates are now reaching a historical minimum, thanks to government imposing new, stricter rules. However, housing is still very expensive for the British population.
To sum up, the affordability of housing in England did not get any better and will not improve within a long-term perspective, even though the UK’s economy is improving. The British population is still rising, thanks to its attractiveness for immigrants as well as the current baby boom, and therefore the demand for new house building is still rising.