I have commented at length before on the plight of the first-time buyers in particular who are locked out of the housing market, and I have also presented several solutions to this issue. These range from the Bank of Mum and Dad to the NewBuy and FirstBuy schemes. A growing problem and one, I believe, we must address soon is the issue of lack of social housing coupled with the increasing demand for new homes.
New figures released by the National House-Building Council (NHBC) have revealed that public sector housing registrations in the UK continue to fall with social housing numbers down 41% between March to May 2012, compared to the same period last year. Registrations to build new homes in the private sector, the current engine for much-needed growth in the UKs overall housing supply, have also decreased by 3% from the same period last year (20,035 in 2012 - 20,559 in 2011.)
The Government has already pledged to increase housing levels, as seen by Vince Cables recent housing crisis summit with Grant Shapps. It is critical that we also continue to monitor initiatives such as the NewBuy scheme to assess their success in increasing the number of new homes built across the UK. To refresh, NewBuy is a scheme which allows first-time buyers with only a 5% deposit to get on the housing ladder. Schemes such as this will allow many people who would otherwise have been locked out of the housing market to get on the property ladder; however they do not address the underlying problem of a lack of housing in this country.
The lack of social housing is one of the key issues perpetuating the poverty trap for many households in the UK today. According to the latest statistics from Shelter, the housing charity, over 1.7 million households are currently waiting for social housing. New figures show that over the last year there has been a 61% rise in the number of households with children living in bed-and-breakfast accommodation, up from 1,660 to 2,339.
If we fail to respond to the downturn in housing supply, then over the next few years we will face unwelcome economic and social consequences, including pressures on labour mobility, social deprivation and the poor health and education outcomes associated with poor quality or overcrowded housing. Lack of supply will substantially increase the danger of house prices spiralling up again when we are out of the recession and confidence does eventually return to the market.
While the signs coming out of Whitehall are positive, the answer to the lack of housing stock seems to be in encouraging more public-private sector schemes to build more new homes. Also, schemes such as NewBuy and FirstBuy should be increasingly promoted as initiatives that will encourage more people to get on the housing ladder. This will also have the knock-on effect of freeing up social housing currently being used by those who could realistically take that first step on the ladder.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 50 people serving private and corporate clients.