RICS Predicting Rents Could Rise 15 Per Cent By 2023


Housing RICS Predicting Rents Could Rise 15 Per Cent By 2023

07 Feb 2019

Affordability issue in housing created by government policies e.g. stamp duty and inaccessibility of mortgage hit the mid-to-top end housing markets where the highest impact is visible in the capital city and other regions are picking up. Rents increased in many parts of the country where Edinburg witnessed highest rent hikes in the last few years. In 2008, the average rent of all types of properties in the city was approx. £747, and after 10 years the rent is £1,062. During the same time, rents in Glasgow grew from £567 to £749.

Homelessness is growing in Britain where, in 2018, 77,000 households were living in temporary accommodations. Falling wages and low construction, further, reduced the affordability of many such home seekers. The number of people in need of homes is increasing each year, where the government is spending over £2m a day towards temporary accommodations – as there are no long term solutions for the problem.

Mounting Green-Lands In The UK

The government may have to rethink over the green belt, which has turned into brown-fields in many regions with no environmental values. There are many warehouses, petrol stations, railway sidings, and other unused lands, which are of no use to the community. As per ONS data, the country has one of the lowest levels of built per capital environment in the EU where only 2 percent is concrete and 98 percent is natural land.

Hamptons claims if the green belt around 80 railway stations is recreated into homes it can provide 509,000 homes to Britain. There are many other studies supporting such constructions, where strategic developments on green-lands can increase supply and reduce unaffordability issues.

Policies Needed To Resolve Shortage

UK housing issues started in 2008 where the sector continues to undergo a series of changes, basically, determined by the choice made in the housing by the buyers and the policymakers. In 1971, the price of homes was 3 times the average salary, but now the price is 7 times the average salary of people, and the deposit needed to buy a home has increased 10 percent in the year.  From 2001 to 2007, the home price gained exponentially but the salaries did not increase at the same ratio. The problem became prominent in 2008 post-recession phase, and now the buyers are facing unaffordability issue.  Scottish government claimed over 80,000 affordable homes have been delivered since 2007, while, in 2018, a 19 percent increase in social renting homes was reported when 5,340 such homes were provided. Currently, the population has grown to 400,000, which is three times the population in 2001.

Though the housing stocks need to meet the growing demand, developers are not producing affordable homes for the low-income buyers, instead, they are investing in luxury projects and the government needs to make sure the projects on green-belts are planned in a way to promote affordability. 

Strategy to built homes close to workplaces or cities, supported by relevant infrastructure, can enhance supply.

To maintain the greenbelt and also handle the housing crisis, homes should be constructed using higher environmental standards and be at the right place.

To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com).

 

 

 

 

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