Why Are UK House Prices So High? Developers Have Failed to Build New Homes
https://www.bloomberg.com/graphics/2024-uk-housing-crisis/
by bloomberg
Why Are UK House Prices So High? Developers Have Failed to Build New Homes
https://www.bloomberg.com/graphics/2024-uk-housing-crisis/
by bloomberg
33 comments
*From Bloomberg reporters Eamon Farhat, Tom Rees, Olivia Konotey-Ahulu and Kyle Kim:*
Britain’s housing crisis has become so acute that the next government will need to build the equivalent of another city the size of London to make up for five decades of below-target construction, analysis of official data shows.
**CHART:** [**Housing Shortage Most Acute in Britain’s Most Populated South**](https://preview.redd.it/housing-shortage-most-acute-in-britains-most-populated-south-v0-o3l0w3rzdq8d1.png?auto=webp&s=304ec9a2205ea5f7a78dfcdbd7fe7d062f4efc83)
Ahead of a general election in which property has become a key issue, a Bloomberg analysis of new-home completions shows that in some parts of the UK just one place was built for every 10 extra people in the population from 2011 to 2021. That shortfall is the main factor driving the country’s worst housing crisis since World War II.
For almost five decades, developers and local authorities have failed to deliver homes at the pace of other wealthy nations in Europe — or even at the rate Britain did through the 1960s. Younger voters in particular are angry that the pandemic and 14 years of Conservative government have only worsened the problem.
**CHART:** [**Britain’s House Building Falls Behind European Neighbors**](https://preview.redd.it/britains-house-building-falls-behind-european-neighbors-v0-q8mdxrfldq8d1.png?auto=webp&s=757d183a3a4a199cbfd19c1cf317539b994e98b2)
The “Affordable” New Builds in my area start at £350.000……
It’s utterly absurd.
Ultimately it comes down to supply and demand. The UK population is huge considering the land mass in comparison to other countries.
When you import hundreds of thousands of people is there any wonder that housing stock doesn’t meet the demand?
Something, something, supply and demand… Doesn’t matter in the slightest how many new homes you build if you’re just going to flood the country even faster!
More dangerous that people coming in boats (how they will afford 400k if they come with nothing ), or builders not building enough. More dangerous than them are the investors. Companies like BlackRock. Rich people from other countries buying houses as investment. That’s the problem .
Feature not a bug, people who own a lot of property want their investments to go up in value, not down.
This means they want it as difficult as possible for developers to build new homes. Which has been entirely successful.
As a company, if you can make your product for peanuts and sell it for a fortune, you do it. And you don’t flood the market or you won’t be able to sell for a fortune any more.
Close but no cigar… There have been many studies why. In no particular order:
– lack of skilled trades,
– insufficient volume of materials,
– planning system that inhibits accurate /reliable forecasting of land ready to develop.
– Under funding of local authorities (planning and elsewhere)
– insufficient new infrastructure to support new houses (water, sewage,roads, to schools & hospitals)
– the over sized land banks held by developers, and almost totally sub contracted work force are both causes of and effects too.
Developers aren’t passive victims in all this, they could do more… But they’re businesses not social enterprises.
Every government since Thatcher has known about the problem, promised to do “something”, and really not made much difference.
Apart from the building of homes, the economics have changed substantially for the worse. Low interest rates fueled massive price increases. ’08 financial crash /austerity/Brexit/COVID made the poor and middle class poorer. The unlimited printing of $ by the USA to deal with COVID has led to global inflation, and made everyone poorer.
Last but not least, the demand (population) has gone up too. _Legal_ migration was 750k/year for the last two years, and had been running 300-400k/year for the last decade. That’s a new city every year.
It’s not just a failure to build new homes – although that is clearly a problem.
It’s rampant speculation in the property market in every corner. Housing has been fully financialised – it’s not primarily a place to live, it’s primarily an investment.
It’s older people hanging on in big homes when their family leaves and nothing incentivising them to move to a smaller place.
It’s BTL mortgages allowing people with limited capital to become amateur landlords and stop FTBs getting those properties.
It’s thirty years of right to buy and very little social housing being built since against the background of a growing population.
Its ludicrous planning regulations that stop building almost everywhere – except evidently flood plains.
Those utter *bastards*. Lounging about when they should be *developing*.
And every new build is a 4-5 bedroom house for £400k in the middle of a crappy estate.
We need high rises with a mix of 1-3 bedrooms. I’m literally never going to be able to own anything as a single person.
This is an insanely complex issue and it’s super easy to be (dangerously) black and white:
Everything from the cost of materials, to drops in trade apprenticeships to immigration to cost of living to people living longer etc etc etc has contributed.
IMO, we need to find a way to build STARTER FLATS (like they do in Europe). They are quicker and cheaper to build and buy, and can be built in inner cities. They also help address the first time buyer space which desperately needs attention.
But they are building houses… every field near me is being paved over as we speak!
In 2019 we bought a bit of land. It took 2 years to get planning because a single councillor happened to have a personal dislike of the original vendor. There was no valid reason for an objection, as the council themselves told us. In that two years, material costs skyrocketed and the development was no longer viable in original form. Build cost went from 800k to 2m. The land is still bare land today, so thats another 10 houses the country doesnt have yet.
On another application recently, despite chasing, an email I sent to planners in December was responded to in May.
As far as I am concerned, the problem is the planning system and far too much power resting in the hands of local councils with planning staff who only work a couple of days a week. It results in delays that can bankrupt firms involved. The planners also have far too much control over the end designs, but arent educated in design, so thats why most of these new estates look like crap.
People love to blame developers, but really the public ire should be directed at planners. Sadly it isnt, as most folk dont come into contact with the system. Ask a builder, architect or anyone involved in regularly making planning applications about it and youll hear some surprising stories.
Everybody wants to sell their home for a profit and to maximise their return, they don’t want the same as they paid after time has passed and certainly not a loss, so exisiting-home prices will only keep going up and its these that are a reference for pricing new builds
The major house builders are in a cartel with financial institutions to control the pipeline of new housing in the U.K. and this is done because our entire economy is built on a house of cards which dramatic rises and falls in the housing market could destroy.
We didn’t build it this way but inevitably we will be the ones who suffer and pay for it. The quality is awful, the prices are unaffordable, the banks are more cautious and fee hungry than ever and real wages haven’t changed in a decade whilst the cost of living has pretty much doubled.
I’m in my early 30s and pre-kids but honestly? I don’t know whether I’ll be able to ever afford to pay the £1k a month per child for childcare, the babysitting costs, the expenses they run up just being kids… why is my career more important than my wife? Which one of us takes the financial and career hit to stay home and look after kids? Is it fair to make one partner pay for everything and then pay you a salary so you’re not losing out? These are real concerns that real people are having right now.
These issues (if they ever get fixed) are going to take at least a generation to correct. My plan is to leave the U.K. as soon as possible and start my family in a country that treats people better and has a safer future for my family. I’m a citizen so I can always come back when it’s better but I think anyone born since 1990 has paid enough already…
Millions of extra people and foreign passport holders being allowed to buy land / property can’t help matters. In most countries foreigners can’t bug land, where I live (Thailand) foreigners can only buy condos and that’s only if 51 percent of the units are Thai owned, it works for them, as does their non nonsense immigration system, overstay ur visa or commit a crime then off to prison for you until u have served ur sentence and can pay for a flight home.
They haven’t failed to build new homes, they’ve successfully restricted the rate of their construction to maximise their profits by creating an artificial shortage. Hence why they will buy land and sit on it for years even decades with full approval to start construction.
The entire industry needs reform and tighter regulations. For anyone that thinks otherwise these developers don’t care about high quality housing or housing estates they will only do the bare minimum legal requirement for them.
>Why is my bath overflowing? *Because my plumber didn’t install a bigger bath.*
vs.
>Why is my bath overflowing? *Because I turned the taps on and left them on.*
Demand is the problem, slow build rates come after, not before.
Demand comes from population increases, immigration, internal migration and investors.
Building more will not solve anything so long as those demand sources are constant, or are increasing, as is the case for England.
Can we also talk about how dogs hit the quality of most new builds is? We live in one at the moment and there are probably (and this is no exaggeration) over 500 snagging issues.
Yes, I’m sure there are no other factors making the problem considerably worse. Nothing to look at here we’ve got the issue completely worked out.
Not building enough houses, and people are apprehensive to buy flats to live in due to leasehold
What remains of nineteenth century terraces and the majority of twentieth century council houses are usually so much better than your FTB’s box-like new build. For 300k or more, they want to give you a ground floor with a small kitchen and a living room and a first floor with two small double bedrooms and a very small shared bathroom. There’s no separate dining area and hardly any storage room. There’s no front garden and barely any driveway, and the back garden is perhaps large enough to swing a cat. What developers churn out at the momemt being objectively worse than much 20th C social housing stock (excluding towerblocks) is a fucking disgrace. The estates themselves are often ugly as sin, as well.
Have just come back to the UK for a visit. The amount of NIMBY signs I’ve seen is ridiculous. It’s not just the developers fault, especially if they can’t build in the first place.
There should be criteria for builds and if met it is auto approved. None of this approval BS which delays stuff and adds to the cost.
OP why did you make up a title that’s completely irrelevant to the news article?
Real title::
# UK’s Housing Crisis Needs a London-Sized City to Fix It
Developers and local authorities have failed to keep up with population growth and the pace of building across Europe.
And yet we are still having people flooding in across the channel expecting to get housed.
Its on successive governments surely. This is decades in the making.
You have the large portion of burden for homebuilding on developers.
They aren’t doing it out of the goodness of their heart, they are businesses with profit margins and shareholders to satisfy.. how the hell did people think it would turn out exactly.
It is my British values to import a million people every year to keep house prices high and wages depressed 🙂
Wait a minute. I thought mass importing 3rd worlders was good for the economy. Surely they can help us build all the houses we need!
Supply and demand – if there are few and many want it, it drives the price up.
Think Taylor Swift tickets? Face value £100, selling for £5k. Exactly the same principle to houses.
This is a generational issue and will last 20-30 years (and that’s IF we take action). The concept of ‘house ownership’ has changed forever.
I’m convinced that all the developers are part of a syndicate and they just “trickle” properties to keep the prices high and to gouge the market.
Materials have increased by 36%…. It’s greed through the whole supply chain.
And they don’t even make them with solar panels on and an electric car charger as standard, imagine the energy we could produce and save if every house had them 🤦