In this blog I mostly only
talk about two of the three main sectors of the local property market - the private
rented sector; and the owner occupier sector. However, as I often stress when
talking to my clients, one cannot forget the third sector, that being social housing sector (or council housing as some people call it).
In previous articles, I have spoken at length about the crisis
in supply of property in Loughborough with not enough property being built. However, in this article I want to talk about the other crisis – that of
affordability. It is not just about the pure number of houses being built but
also the equilibrium of tenure (ownership vs rented) and therein, the affordability
of housing, which needs to be considered carefully for an efficient and
effectual housing market. An efficient and effectual housing market is in everyone’s
interests, including Loughborough homeowners and Loughborough landlords, so let
me explain.
An average of only 179 Affordable Homes per year have been
built by Charnwood Borough Council in the last 9 years. The requirement for the provision of subsidised housing has
been recognised since Victorian times. Even though private rents have not kept
up with inflation since 2005 (meaning tenants are better off) it’s still a fact that there are substantial numbers of low-income households in Loughborough devoid
of the money to allow them a decent standard of housing.
Usually, property in the social housing sector has had rents
set at around half the going market rate and affordable shared home ownership
has been the main source of new affordable housing. However, irrespective of the
tenure, the local authority is simply not coming up with the numbers required. If
the local authority isn’t building or finding these affordable homes, these Loughborough
tenants still need housing and some tenants at the lower end of the market are
falling foul of rogue landlords. Not good news for tenants nor for the vast
majority of law abiding and decent Loughborough landlords who are tarnished by
the actions of those few rogue landlords, especially as I believe everyone has
the right to a safe and decent home.
Be it Tory’s, Labour, SNP, or Lib Dems, everyone needs
to put party politics aside and start building enough homes and ensure that
housing is affordable. For example, 2017 was one of the best years for new home
building in the last decade (217,000 homes were built in 2017), Despite this, overall new home building
has been in decline for many years from the heady days of the early 1970s, when
an average of 350,000 new homes were being built a year. We simply
aren’t building enough ‘affordable’ homes in the area.
The blame cannot all be placed at the feet of the local
authority as Council budgets nationally, according to Full-Fact, are lower
with threats to cut across various areas each year. So, what does this mean for Loughborough homeowners? Well,
an undersupply of affordable homes will artificially keep rents and property
prices high. That might sound good in the short term, but a large proportion of
my Loughborough landlords find their children are also priced out of the
housing market. Also, whilst your Loughborough home might be slightly higher in
value, due to this lack of supply of homes at the bottom end of the market, as
most people move up the market when they do move, the one you want to buy will
be priced even higher.
Problems at the lower end of the property market will affect
the middle and upper parts. There is no getting away from the fact that the Loughborough
housing market is all interlinked - it’s not called the Property ‘Ladder’ for
nothing!
Give us a call on 01509 260777 to discuss your opinion or get some property advice from us!
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