Property unaffordable for 100,000 households a year in England

Almost 100,000 households in England are being priced out of the property market each year because of a shortage of affordable homes to rent or buy, according to a report.

Research by the estate agent Savills, shared with the Guardian, found the number of priced-out households had risen from its previous projection in 2015 of 70,000 a year. This was in part because of a change in how housing need is assessed, but also due to rising prices and stagnant wage growth.

On Wednesday, the chancellor, Philip Hammond, reiterated a pledge to build 300,000 homes a year by the mid-2020s and unveiled a package of measures to support housebuilding. Savills said one-third of those would need to be offered at below market prices to meet the growing need for affordable homes.

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About 96,000 households are unable to afford homes at the market rate, either to buy or rent, Savills said, with the vast majority in London and the south. It said varying approaches were needed to address the shortfall in different parts of the country: low-cost rented homes were needed more in markets in which incomes were smaller, while a mixture of homes, including shared ownership, would help in more expensive areas.

In London, 20% of the households affected have incomes above £35,000, Savills said, while the same proportion earn less than £10,000.

Over the past three years, 55,000 fewer affordable homes have been built each year than were needed, the research found. Although 42,500 households in the capital required below market rate housing, only 8,800 affordable homes a year had been delivered. In the south outside London, 15,500 affordable homes a year were being built while 34,100 were needed.

Meanwhile, in the north of England, low incomes were locking out 9,600 households a year, with 8,900 homes being delivered. 

Although the post-budget headlines were dominated by Hammond’s decision to scrap stamp duty for the majority of first-time buyers, his announcement included more money for building and rule changes to help councils provide housing.

A speech by the prime minister, Theresa May, at the Conservative party conference in October made a commitment of £2bn over four years to fund social housing. However, to house 100,000 emerging households over this period would need funding of £7bn a year, Savills said.

Paying for the new homes would reduce the housing benefit bill by £430m a year.

Helen Collins, the head of housing consultancy at Savills, said the budget had offered many positives for the housing sector, but expressed some concerns.

“While the chancellor had plenty of good news, we feel there are still some important issues missing from housing policy,” she said.

These included no changes on building on greenbelt land and no additional funding for homes for social rent. “There was little reference to the importance of social rented homes as a better and cheaper alternative to the private rented sector for very low-income households,” Collins said.

https://www.theguardian.com/business/2017/nov/27/property-england-priced-out-households-affordable-homes-savills-report?utm_term=Autofeed&CMP=twt_b-gdnnews#link_time=1511746818