What would it take to make housing more affordable for first-time buyers?
I asked more or less the same vexed question in 2013 when this column kicked off. Three years later, it feels less answerable than ever.
In terms of supply and demand, the number of new homes currently under construction is well below the UK government’s target of 200,000 new homes a year.
That figure is almost half the amount needed annually just to meet existing demand, according to the House of Lords Economic Affairs Committee.
And yet, rather than increasing new housing supply, the latest housebuilding data shows that residential construction levels are actually falling: down by 3.2% in May – the biggest drop since February 2014.
No-one is expecting good news either when post-Brexit figures are published.
According to the Welsh government, ‘affordable housing’ is a land-use planning term used to describe “where there are secure mechanisms in place to ensure that it is accessible to those who cannot afford market housing, both on first occupation and for subsequent occupiers.”
In other words, it means state-subsidised accommodation in some guise or other.
As far as ‘market housing’ is concerned though, affordability is a variable concept.
The UK's largest mortgage lender, the Halifax, recently published a league table of the most affordable and least accessible places for first-time buyers. Unsurprisingly, the cheapest places to buy are in western Scotland whilst London is just plain ludicrous.
Yet even where prices are comparatively reasonable, borrowing is no longer straightforward.
Regulations introduced in the wake of the 2008 financial crash require far tighter rules as to what banks and building societies must do before they approve someone for a mortgage.
The really bad news is that a further study into income levels found that under-35s earned £8,000 less in their twenties than those born between 1966 and 1980.That would make them the first generation to earn less than their predecessors over the course of their working lives.
As ever, it’s the construction industry that is getting squeezed by uncertainties. While governments talk about sustainability, the house-building industry knows that it is viability that remains the key - and it’s getting tougher to achieve.
For some, there is little point being in business if there are insufficient margins to allow reinvestment in new projects. Eventually the sector will to shrink to the extent whereby the question of affordability is academic.
What’s needed, say industry bosses, is a means of keeping costs down – and that is where local authorities have a key role to play.
Councils understandably favour redevelopment of existing ‘brownfield’ sites over seeing green fields dug up. Yet they make few concessions over the difficulties presented when previously undetected old sewers and industrial remains means site layouts have to be revised, adding to design costs.
A more flexible approach by planners would allow development without the need to submit fresh plans every time a change is necessary. It would also remove expensive delays.
There is always a good argument for doing things smarter. Reducing costs and ensuring builders pass the savings on to house-buyers is a compelling one in my view.
Losing the savings habit
Having something set aside for a rainy day used to be a good idea. Nothing has changed other than it’s a theory less practised than ever.
A couple of surveys show that families have lost habit of having savings to cover the cost of fixing the car or paying for repairs in the home.
When asked how they would pay for an unexpected bill of up to £500 within a week, less than a third said they could dip into savings. Just as many said they might have to use high-cost credit or else ask for family help.
Young adults aged between 18 and 24 were the age group least likely to have funds available, the surveys also suggested. Women were less likely to have cash available than men, and people in the Midlands, Scotland and Wales were the hardest-pressed in the UK.
I’m sure this is something the pay-day lenders already know.
It’s not all over by any means
We’ve had a great summer of European football where Wales distinguished themselves tremendously.
What especially pleased me was how a good number of Swans players – past and present – took the opportunity to showcase their talent while playing for their nations. Now it’s back to the hard reality of the Premiership and some uncertain times, according to supporters groups.
The effect of success is that others inevitably want a share of it. I’d say the new owners come into such a category and I’m OK with that.
If however the deal had been done with the result that Chairman Huw Jenkins had walked away from the Liberty then I would be a very worried man. Thankfully, he’s staying.
It is the right circumstances that create successful leaders and rarely the other way around. Huw is the exception to that rule. He manages to tick both boxes equally.
He has brought us this far, we should trust him to deliver the next phase.
