Issues Facing the South
House Prices
We have all been affected in one way or another from the seemingly relentless rise in house prices over the recent years. Home owners have seen the values of their property increase dramatically, while first-time buyers find it harder and harder to get onto the property ladder. This is a serious issue that needs addressing.
The government believes that the solution to this problem is to build more and more houses. We do not believe that this will solve the problem: indeed, it could even make things worse in the longer term! First of all though, it is helpful to understand the reasons behind house price inflation.
Reasons for House Price Inflation
- There are Fewer Cohabiting Couples
- Both Men and Women are Earning Salaries
- Migration from Within and Outside the UK
- More Single People
As the number of cohabiting couples decreases, the number of adults living alone (or with children) increases, and so the demand for housing goes up. Sadly, the increase in demand due to divorce and family breakdown is very significant in this country: hence it is a major cause of the increase in house prices.
It may seem like a glimpse of the past now, but not so long ago it was considered normal for a married man to go out to work and earn money while his wife looked after running the household and taking care of the children. Now things have changed, and both men and women in a relationship tend to earn similar salaries. Because of this, households are able to afford to pay much larger mortgages and with housing demand on the increase, this has magnified the effect and pushed prices up even faster.
The North-South divide is still very much alive in England. People still consider the South to offer better employment prospects, and so there is still a tendency to migrate to these areas. This has a dual effect of putting added pressure on certain areas while causing other parts of the country to decline economically.
The UK population has also increased significantly in recent years due to a large amount of immigration from former commonwealth countries and now from elsewhere in the European Union. This increase in population of course requires housing, and so has put a great deal of pressure on the housing market.
More single people wanting a property of their own is another major cause of elevated housing demand. It was normal before not-too-long ago for young people to live with parents until they reached their early twenties, and then to get married at a relatively young age before buying a house with their new partner. Now of course, young people are very keen to move out of home as soon as possible, and then do not couple up until they reach their 30s – hence the increase in the number of single people wanting housing.
Housing Supply
The other factor is of course the housing supply. This is what the government want to increase, mainly because it is politically a far easier move than trying to tackle the causes of housing demand (not to mention the other benefits of increased tax revenues from more properties). However, the trouble is that in cases like these, supply actually affects demand. It has long been known that building new roads does not solve traffic congestion: it works for a few years and then the amount of traffic increases to clog up the new road and another one is needed! That is why a previous government stopped the road-building programme a fair few years ago – it was not sustainable.
Housing will be exactly the same: in 2026 there will still be a "need" to continue building more and more houses at an ever increasing rate, until we either run out of space or resources (by which time the quality of life will be so low that nobody will want to live here anyway). The only alternative is to tackle the housing demand, by having a sustainable population policy for each region. Currently, no such policy exists. (see the section on sustainability).