Too little housing...?
Why does the property market keep going around in circles...?
As an agent, this is a question that I am constantly asked. We seem to drift from one bubble to another recession with the expectation that prices will rise overall and it will all come out in the wash...! Well, to some degree that is true as every market makes a market and the Government see the housing sector as something that not only fuels so many other trades and business, but will also be something that continues to be a uniquely quirky appeal in the UK when compared to other similar countries. After all - has anyone really lost out on property long term?
Sure - short term a recession can seriously affect your wealth, but long term property will always prove to be a sound investment for discerning buyers.
And why are we now seeing such a lack of available stock when so many people need and want to move..?
The simple truth is that we are not (and never have been in the last 50 years) building enough new homes. Take a look at this graph which demonstrates the problem in a nutshell.
It shows that in the 1980's, as the construction of new council houses shrank to almost nothing, there was a slight rise in the number of private homes being built, peaking at around 200,000 homes a year at the end of the decade. Then it fell back – and stayed fallen. Between the early 1990's and the onset of the financial crisis in 2008, supposedly a boom time in Britain, the number of new private homes built each year didn’t go up. It barely budged from the 150,000 a year mark. The market failed. There was increasing demand without increasing supply. Mid-boom, as the imbalance between the number of people chasing a house and the supply of new homes reached a tipping point, average house prices took off like a rocket, trebling between Tony Blair’s accession and the 2008 crash.
So what's the answer..?
There is no quick fix. It is a problem that has been brewing for decades, despite the various Governments being totally aware - yet still we have antiquated planning laws and a generally obstructive system that does nothing to actively encourage strategic and high volume building to help relieve the problem. And until we do the truth remains that basically we are out growing the supply of homes available in UK - whether that is buying or renting - and the consequence will be continual rising prices as demand outstrips supply. Only an economic disaster quells the growth (as we saw in 2007), but as sure as eggs are eggs, the property market bounces back and we start the cycle once again...
Are you thinking of moving? It is a great time to do it! If you are up-sizing - get in quick as the gap will only get bigger and while mortgage rates are at an all time low improving affordability, if you can minimize your exposure it has to be good all round.
Fancy a NEW HOME? Why not take a look at what we have available including 3, 4 & 5 bedroom semi and detached houses with very generous gardens and a beautifully finished product.
Whatever your housing need, Oakwood homes are here to help. Sales, lettings, mortgages, Land & New Homes, conveyancing or even just some sound advice - you can call us on 08456 44 7070 or visit your local office in East Kent.
Happy house hunting...!