The UK housing market is dealing with a slowdown, where the buyers are waiting to see what happens after Brexit. If the uncertainty is cleared, there is the chance of increasing demand, but the country faces a £10bn trade deficit on construction material, where 60 percent of the material is imported from the EU, and 92 percent of the softwood timber comes from Europe. In the construction sector, 10 percent of the workforce comes from the European Economic Area, where 19.7 percent residential building sites are from another country (as per The Home Builders Federation data), and the immigration plan restricts the workforce earning less than £30,000 a year. The government announced a number of schemes to support the sector – canceling the rent cuts, increasing grants for social housing and removing the borrowing cap. The rates are low and a new £3bn scheme has been announced to construct affordable homes to achieve the 300,000 new home targets but it is necessary to build the homes at the right places to provide affordable homes grants.
Lack of affordable homes and the millennial buyer
The government believes affordable means social rented, intermediate and affordable rented – houses that can be provided to the eligible households unable to buy from the markets. The facility also includes the provision of shared ownership where the cost of renting is below the market level but some shared ownership come at a very high price, where even a 25 percent share can cost over £3000 a month in mortgage.
The lack of affordable homes is an obstacle, especially, for the millennial, where the government statistics show almost 50 percent of the new-born in the country are living in rented accommodations. A number of families living in privately rented homes with children increased 94 percent in 10 years. According to 2016- 2017 stats, ‘the generation rent’ – are the new ‘generation parents’, where 49.2 percent of the children born in such families live in rented accommodations, where the biggest risks include the risk of eviction. The highest growth in the number of renting families was seen in the regions - northeast England, the Humber, Yorkshire, and Northern Ireland.
Young living with parents and overcrowding
The data also finds the average age of the first-time buyer has increased from 26 in 1997 to 34, and nearly a million young adults are living with parents than two decades ago. Younger people are moving to live with their parents as they find it difficult to move out. The average household sizes fell in years from 1951 to 2001, from 3.3 people per household to 2.36, but it again increased to 2.39 people per household in 2017 – as per the ONS data.
Overcrowding has been a major problem. The housing surveys show 1 million people are living in overcrowded rented homes that has increased to highest levels, since 24 years ago, where more than a quarter of a million families are living in overcrowded private rented homes, that is second highest since 1996.
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