Where there is in fact a housing crisis in the UK, the argument lies in the underlying causes and the proposed solutions.
While the most opinion believes that the root of the problem is the lack of housing supply, Housing Secretary James Brokenshire on speaking to The Big Issue stated that: “There are significant issues but ultimately this comes down to building more homes. The challenge is how to get things built and how to build the affordable homes that the country desperately needs…”
However, some intellects contend that the problem is the result of several issues like inefficient government policies, excessively high housing prices, and misplaced houses.
The popular belief that an inadequate supply of housing is the main cause of the housing crisis can probably be explained by the law of supply and demand. Basically, there is a shortage when the supply is lower than the demand. And when the demand is higher, as in this case, the prices of the properties automatically increases. As such, only those who have the financial ability are able to acquire a property.
The lack of policy
As of now, the government has no policies to control the skyrocketing prices of properties. With the number of the population foretasted to reach 73 million by the year 2041 (National Statistics 2018), the call for more housing will continue to drive housing prices progressively. Thus the call to increase the supply of housing to quell the crisis. Discussion of possible policies to address the housing crisis in the parliament usually circles around the demand for the government to construct more and to build faster. However, even if the supply matches the demand, property values will continue to increase.
Local and foreign buyers purchase prime real estate even before these properties get developed believing that their value will continue to escalate as the market grows. Some would sell for a hefty profit in a short period of time, others would develop the property to generate more income, either way, the value of the property will appreciate, and such speculation will start to drive the price of the property up.
The resulting allegations from a BBC documentary in 2012 on the main cause of the housing crisis points to the mishandling of the properties sold to private individuals and the lack of follow up. Selling the property to private individuals at half its value then them selling it for a profit in a short period of time. Clearly, the lack of policies to regulate such activities deprives others the opportunity to housing.
If such is the demand for lodgings, how is it that the number of empty houses across the United Kingdom have increased to more than 216,000 for the second consecutive year? A fifth of these empty homes are found in the northwest, whereas the focus of demand is in the middle and the southeast regions of the UK.
This brings us back to the argument that the underlying cause of the housing crisis is the lack of housing supply. Although it is not without merit, it is not entirely true. There are other factors to consider in solving the housing crisis. But, it is without a doubt that the government should build where there is a demand and create jobs where there is an ample supply of housing. Another angle that the government could look into is the growing popularity of micro housing and prioritizing locals.