Both of the main candidates for London Mayor have pledged to put housing at the top of their mutual agendas. The reason is obvious – housing is a huge issue in London and there are votes to be had if the Mayor chooses to make owning or renting easier.
The scale of the problem keeps getting bigger – demand has outstripped supply for many years, causing prices to go up in seemingly relentless fashion. The situation is exacerbated as new developments seek to maximise their return per square foot and so are aimed firmly at the luxury end of the market.
What this means for ‘ordinary’ people is nothing short of disaster.
You need a deposit of roughly £70,000 and to be earning over £40,000 a year to buy a very average flat in an inauspicious location.
Yet still people will make great sacrifices to get their foot on the property ladder – forgetting about holidays, taking second jobs, eating a variation of a bread and water diet or whatever it takes.
Part of the reason is that the alternative – to rent, can be even more expensive on a like for like basis.
So the demand is still there for housing that ordinary people can afford to buy. (as well as for affordable housing, which councils demand of developers). There’s just not very much of it.
A further issue is that the fluidity of the London market has reduced. For those who successfully make it on to the first step, making the second step has become that much harder because of the increasing price differential and the costs of moving.
At Purplebricks, we are doing our bit to help by reducing the amount people have to pay in estate agent fees when they sell (or let ) their home and this can make a big difference but unfortunately we are not in charge of stamp duty. The government keeps on tinkering with housing policy introducing initiatives like extending ‘right to buy’, which gives certain people a massive subsidy and gives nothing to everyone else, and these initiatives end up doing more harm than good. Am not even sure they are vote winners.
The real vote winners will be initiatives in planning and encouraging new home building that will help bring more fluidity to the market. Only that way will owning and renting become easier.
- 14 October 2015