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Shortage of Residential Property

Wednesday, 18th November 2015

Categories: Lettings Market Analysis Property Prices Sales

Author: Justin Burns

It’s no secret that London is experiencing a property shortage. With a rising population living in a finite amount of space there’s always going to be pressure placed on the capital to match supply with demand. And although the boundaries of Greater London have constantly shifted over the decades to accommodate its swelling population, people will always want – and need – to be located centrally for work.

With a plethora of recent media stories about people paying high-end rents to live in increasingly smaller or compromised shared housing, it’s easy to see why many choose to stay living in the parental home while they save for a deposit to buy their own place. The alternative is to move further out of London, however, the savings made on rental or mortgage costs can soon be outweighed by travel costs and the extra time added to the daily commute.

So, is it a simple case of maths, or is there more to it? Well, on the surface it would appear that there just aren’t enough houses being built. A report by London First revealed that, despite the population of London growing by almost one million over the last ten years, only 202,400 new homes were constructed during the same period. Another report by the same organisation highlights the potential negative impact that the capital’s housing shortage could have on the economy, as up to half of workers (49%) could leave London due to difficulties paying their rent or mortgage.

Obviously, the housing shortage doesn’t spell bad news for everyone: landlords can expect to enjoy continued rent rises. And with an increasing number of new legislation being passed to protect tenants, there should be better standards of accommodation and care. So, although rents are steep in the capital, tenants can expect more for their money in terms of prompt responses to issues, and greater protection when dealing with complaints and with regard to deposit security.

There are signs that the issue of housing shortages will be addressed, with the Planning and Housing Minister, Brandon Lewis, stating plans for one million new homes to be built in England over the next five years. This should hopefully go some way to alleviating the long-term problem but it remains to be seen how many of those new homes will be built in the capital, where this is an immediate need for housing for workers across all sectors.

Sources:

http://londonfirst.co.uk/wp-content/uploads/2014/03/LF_HOUSING_REPORT.pdf

http://londonfirst.co.uk/moving-out-how-londons-housing-shortage-is-threatening-the-capitals-competitiveness/