So as I sit here wondering what to talk in my first blog only
to receive a text from a good friend who is struggling to find a house. To me
this is such a strange concept to literally have the deposit (ample of deposit
to say the least) and mortgage ready to go but just nowhere to buy.
The housing shortage that is sweeping the nation can’t be
helping the economy with people simply saving rather than pumping back into
goods and services. All this saving, earning little interest, in a hope of one
day being able to either join the property ladder or, as we did recently, move
into a bigger property. The CBI recently noted that the undersupply of housing
stock is leading to house prices soaring in areas. Yet what is being done about
it? Is the simple answer just to build more houses? It certainly seems like one
solution but with land prices increasing too house builders are going to pass
the cost back to the consumer.
I’m no expert at how many people need houses each year but
with approximately 120,000 being built per annum it just don’t feel enough –
perhaps government policy should change to increase the number per annum while
ensuring that affordable housing is available to help those wishing to enter
the market have the opportunity. Next year we have a general election, in case
you’ve missed it, and it feels that each party should have this near the top of
their to-do list. Sort the housing shortage out.
But housing shortage and house prices go hand in hand – increased
house prices in turn prices first time buyers more and more out of the market
and with rents eating away disposable income it is simply a perpetual cycle.
It’s a tough one to really solve in the short term but certainly an increase in
the base rate could dampen off the growth, however the MPC don’t seem keen to
move on that point just yet.
Having recently sold a property the first question that I
seem to be asked is “did you get a good price” and Right Move recently
announced 35% growth in visitors to their sold
houses section. To me it’s a silly question; I wouldn’t sell if not for a
good price. What is the UK obsession with counting the profits (or losses) on a
house sale? Some people simply want their own house.
Now you can’t turn a newspaper without the housing market
being talked about, the perpetual housing bubble that people fear will burst
one day. Well it doesn’t feel like that will be soon, in fact with schemes such
as help to buy and house builders tempting first time buyers with a number of
freebies it feels like the market still has a bit of growth to come. Recent
data from Knight Frank shows that prices are still below the peaks of 2007, well
unless you live in London, SE, East of England or Scotland (lucky them!), yet
here I sit in Yorkshire with prices still 5.4% lower than 2007. 
A number of reports highlight “forecast” house price growth
in the UK but the general consensus is around 8-9% in 2014 reducing to 3-4% in
2015 but continuing to marginally grow each year thereafter. The one point that
excites me is that much of this growth is forecast to come to the regions,
particularly those towns within reasonable commutes to London. It simply leaves
me asking two questions: (i) how would you solve the housing shortage and (ii)
how else, other than current schemes, can first time buyers be helped onto the
property ladder.
And lastly, was quite surprising to see Phil Greer step down
as MD of Shepherd Construction and Terry Hartwell as Property Director at
Morrisons. It will be very interesting to see who steps up to replace both and
drive the business strategy forward.
I hope you found my blog insightful. Any comments are much
appreciated as I am new to this. Free feel to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to
property and construction.
Enjoy the weekend,
Lee
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