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Unexpected Population Growth Fuels Housing Concerns
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Previous population growth expectations have been surpassed by 12%, fuelling concerns that only the very wealthy will be able to afford to buy a house.
The most recent population predictions have underestimated growth in England by 89,000 people, Bilfinger GVA has found.
According to the latest official forecast figures from 2012, England’s population was set to increase by 350,000 people in 2012-13 and 384,000 people in 2013-14.
However, mid-year estimates from the Office for National Statistics (ONS) has now calculated that population growth in 2012-13 was in fact 372,000 and 451,000 the following year.
Between 2012-14, population growth was underestimated in eight out of nine English regions by the 2012 National Population Projections and in about 60% of local authorities.
Bilfinger GVA warns that these projections are “only a starting point”1 in estimating housing need, as they do not consider future economic growth or affordability issues.
Jonathan Harris, of mortgage brokers Anderson Harris, explains: “There is a housing crisis in the UK because we are not building flats and houses fast enough to keep pace with demand.
“If population growth is going to be that much greater than previous forecasts suggest, lack of housing will be even more of an issue in the future.
Unexpected Population Growth Fuels Housing Concerns
“Already, property prices are being pushed beyond the reach of first time buyers and growing families, and if this situation continues, only the very wealthy will be able to afford to buy.”1
Director at Bilfinger GVA, Neil Morton, says: “It is crucial that local planning authorities take this into account when using the latest Department for Communities and Local Government Household Projections, which are predicted by the 2012 National Population Projections.
“With many authorities still relying on revoked regional plans, the policy vacuum presents an opportunity to proactively engage with the local plan and appeal process with up-to-date housing need evidence.”1
Today, the country is struggling with a housing crisis; a decade after the Barker Review of Housing Supply revealed that around 250,000 homes needed to be built every year.
In 2012-13, England had one of the lowest house building rates since 1923.
Construction was completed on only 108,190 new homes. This problem was intensified by falling affordability, with the average property price to salary ratio almost doubling in the past 40 years. The price of the average home is now almost seven times the average buyer’s annual earnings.
At least 220,000 new homes need to be built yearly to meet new household predictions, according to the Home Builders Federation (HBF). And there is already a backlog of prospective buyers.
However, the HBF also revealed that momentum in the house building sector is growing, with work starting on 137,310 new homes in 2014, up 10% on 2013 and 60% on the record low of 2009.
Between January and March this year, construction began on 40,340 homes, up 11% on the same period in 2013.
The Government’s Help to Buy scheme, launched in April 2013, has boosted a significant increase in house building, according to the HBF.
This year, the Conservative’s general election manifesto focused on “everyone who works hard having the chance to own their own home.”1
The party promised to keep mortgage rates low and build more affordable homes, including 200,000 starter homes for first time buyers under 40-years-old.
They will also extend the Help to Buy loan scheme to 2020 and introduce a new Help to Buy ISA for those saving for a deposit.
The Conservatives also plan to extend Right to Buy to housing association tenants and create a brownfield fund to unlock homes on brownfield land. Additionally, local people will have more control over planning and the green belt will be protected.
