News More People Being Priced Out Of Property Market
Published by Ben on 16th January, 2018
When you look at the property market, it is very easy to focus on property prices. Even though recent months has seen a focus on falling house prices or house prices slowing down, it would be fair to say that in general times, certainly over a longer period of time, house prices are on the rise in England. Looking at house prices of a few decades ago will make people wince but too much can be read into these changes, nowadays, the key factor probably isn’t price, it is affordability.
Yes, property prices have risen but if wages and people’s disposable income have risen at the same risen, there wouldn’t be an issue. Of course, this isn’t the case and this is why people are being priced out of the market. A study by Hometrack near the end of 2017 saw London property prices listed at 14.5 times the average income of a London resident. This was the highest this figure had ever been. It isn’t just London that is facing this situation, in Cambridge; the ratio was 14 times with Oxford also being cited as a place where property prices are moving away quickly from average income.
Recent studies have highlighted the problems facing tenants and potential buyers
This opinion has been backed up by a study undertaken by Savills. Their recent report suggests that close to 100,000 households in the country are being priced out of the property market every year. This is down to a shortage of affordable homes in the rental and buyers’ market. It is important to remember that while there is a call for more homes to be built in the United Kingdom, it is vital that more affordable homes are built. Private developers will no doubt see the benefits, to them, of adding more penthouse suites in the west of London but these properties will have no impact on people’s ability to get on to the property ladder.
The need for more homes has been recognised by the government. The Chancellor of the Exchequer, Philip Hammond, has announced that there is a plan to develop 300,000 homes each year by the mid-2020s. This is a step in the right direction but Savills have pointed out that there is a need for around 100,000 of these homes to be provided below the market price in order to satisfy the increasing need for affordable housing. This is likely to be an issue that may be difficult to overcome.
London and the south of England have been highlighted
As you would expect, Savills say that the majority of households who are unable to rent or buy at the market rate are found in London and the south of England. This is an area of the market that has received a lot of attention in recent times and it is fair to say that many people have been expanding their options and considerations. Outer London has benefitted from a move away from the heart of the capital in recent times and there are clearly people now looking for affordable options outside of London in the Home Counties.
With this in mind, Taylor Robinson is on hand to help. We offer local estate agent services in areas like Horsham, Crawley and Worthing, areas we believe offer tremendous value for money. If you are looking to find homes in an area you can afford and which appeals to your needs, get in touch and we will be happy to help.