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House prices up 50%

House prices up 50%

It’s election time and there are lots of statistics floating around about different situations from five years ago.

Well, here’s another one for you from West End estate agents, LDG: London house prices have surged by nearly 50% or £195,420 since 2010 – in more evidence of the enormous housing crisis in the UK.

Data from Rightmove shows that the average asking price across the UK soared by £4381 and hit a record of £286,133 in April, driven by a 4% decline in the number of new sellers. This was achieved despite the rate of prices increases slowing from 5.4% last month to 4.6% in April.

The emerging house crisis in the UK is due to a mixture of factors: namely a lack of planning, very low interest rates that have encouraged buy-to-letters – with many people becoming ‘accidental landlords’ – as well as a burgeoning population (net immigration is around 300,000).

This means that all of the parties have had to give housing a high priority in their manifestos. Pressure on the UK’s limited housing stock has never been greater and with sale and rent prices increasing, all parties have agreed that it’s critical for the country to build more homes.

The Conservatives have pledged to extend Margaret Thatcher’s Right to Buy scheme and the time limit on the Help to Buy scheme. They originally said they’d build 100,000 new homes for young first-time buyers; however, Labour then promised to build 200,000 homes a year by 2020, so the Tories said they’d match this – with David Cameron saying he’d build 200,000 new properties for first-time buyers in five years. The Liberal Democrats have also said they’ll build 300,000 houses a year by 2020 – although do bear in mind that none of these are costed.

As well as this, Labour has said that a series of rental reforms will be introduced, including banning estate agents from charging letting fees, legislation to make three-year tenancies the ‘norm’ and put an upper ceiling on rent increase. The party has also said that the controversial bedroom tax will be scrapped, with UKIP, the Green Party, the Scottish National Party and Plaid Cymru saying the same. The Liberal Democrats have also said they want to cap rent increases, while the Greens want rent control and greater legal protection for tenants.

On top of this, the Liberal Democrats want to pilot a scheme called Rent to Own, where first-time buyers slowly but surely build up a share in their home through monthly payments until they own the property outright after 30 years.

Housing is one of the key issues on which future elections will be decided. However, it remains to be seen as to whether any of the parties truly tackles the problems, as it’s such a complex issue, with no easy answers. Come 2020, we can see if the government has managed to come up and stick to some workable problems about this problem, but it could be a big ask. The boom of 50% in prices since the last election, demonstrates just how out of control the situation is.

 

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