Britain may have gone into turmoil on June 24th after we woke up to the news that the majority of the country had voted to leave the EU, but we aren’t actually going to start seeing any affect or damage of the vote until the government triggers Article 50 at the end of March this year.
Prices are expected to rise by between 1% and 4% in 2017
House prices are one of the referendum’s most pressing issues; prices are expected to rise by between 1% and 4% in 2017, according to Halifax’s annual forecast, marking a deceleration from 2016. The crisis isn’t just the rising prices, but the UK’s struggle to keep up with the demand for housing: we are simply not building enough homes.
In a White Paper released yesterday and titled “Our housing market is broken,” Sajid Javid, the Communities and Local Government Secretary writes: “The housing market in this country is broken, and the cause is very simple: for too long, we haven’t built enough homes. Soaring prices and rising rents caused by a shortage of the right homes in the right places has slammed the door of the housing market in the face of a whole generation.”
The growth of the housing market has cooled off massively since, say, this time last year. First-time buyers in particular are anxious to step on-board the property ladder for fear of the unknown, Article 50, and Donald Trump. But the release of the White Paper may be the answer everyone’s after: is building these new homes, particularly for first-time buyers, exactly what we need to be able to one day be able to afford a home? If everything goes the way we’re told it’s going to, the answer is this: more houses = less demand = lower prices.
Soaring prices and rising rents caused by a shortage of the right homes in the right places has slammed the door of the housing market in the face of a whole generation
The report goes on to say: “Soaring prices and rising rents caused by a shortage of the right homes in the right places has slammed the door of the housing market in the face of a whole generation. The housing shortage isn’t a looming crisis, a distant threat that will become a problem if we fail to act. We’re already living in it. Our population could stop growing and net migration could fall to zero, but people would still be living in overcrowded, unaffordable accommodation. Infrastructure would still be overstretched. This problem is not going to go away by itself.”
Across 104 pages of charts and analysis, Javid and his team set out the government’s vision to try and facilitate the building of as many as 250,000 new homes per year to ensure that our whole generation isn’t actually left behind. So yes, Brexit will affect the housing market in the sense that it’s triggered the importance of this desperate need for more homes to be built in our country thanks to the continuously rising prices of our homes. But if 250,000 homes truly are going to be built a year – and at a price we can afford – it might not all be as dismal as it seems.