Paper Example on Main Causes of the Current Housing Crisis in London and the UK

2021-05-28 02:09:46
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While The United Kingdoms capital, London, remains a globally influential center of finance and culture, today, the capital and the country at large, suffers a great housing crisis. The critical housing issue is a nightmare that is occurring a result of numerous causes. Being a nation whose population is among the fastest-growing in the world, for several years now, the greater London has been failing to generate the required number of new homes as needed to house the rapidly growing population. Statistics show that London, as the capital, needs an annual average of about 40,000 new homes just to keep pace with the massive population (Baddeley, 2005). However, owing to the lack of investment in social housing over the past three decades, among other reasons, in 2010-2011, less than half the required number of new houses had been built. This essay, therefore, seeks to discuss the main causes of this housing issue in London and the UK, with particular reference to the concepts and the housing policies in the UK.

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Initially, the imbalance in supply vs. demand of housing in the UK was known to be the greatest orchestrator of the housing crisis. A 2004 Barker Review pointed out that the United Kingdom needed to put into consideration various factors when making the decision of the number of new homes that ought to be built each year; so as to keep up with the rapidly escalating demand (Wenban-Smith, 2004). Firstly, the nations population growth is a significant factor that has increasingly led to the current housing crisis. Today, in the UK, the rapid population growth has led to an increased life expectancy which has in turn adversely affected the housing concepts. Since the 1980s, UKs life expectancy has increased by 2.5 years per decade for the male nationals and an average of 2 years per decade for their female counterparts. Besides, the vast difference in size of the modern day today household as compared to that in the 1950s is another demand-supply factor that has contributed to the modern day today housing crisis. For instance, it is estimated that in the 1950s, an average of 5 people lived per household as compared to todays average of 2 people per property. Thus, with all these factors put into consideration, it is evident that the UKs residential sector, local authorities as well as developers fail to meet the increasing demand for housing. This, in essence, has led to a greater shortfall of the homes that are required so as to be at par with the rapidly escalating demand and hence the current housing crisis (Hill, 2013).

In the same vein, a surge in immigration of foreigners into London in the recent decades has aggravated the current housing crisis. With an increase in the number of immigrants into the nation, the already existing UKs population is forced to compete for housing with the newcomers. With reference to the increase in the number of foreigners, still, wealthy people from countries such as Asia, America, and the Middle East, among others have, in the modern day today, bought up and invested in property in the most desirable postcodes in London (Foster, 2016). For this reason, the housing prices in the capital have absurdly been pushed up.

In the past couple of years, there has been an increase in the number of the buy-to-let investors not only in London as a capital but also across the entire United Kingdom. This has seen the escalation of the current housing crisis in the sense that, as more investors rush into joining the buy-to-let bandwagon, a huge percentage of the housing stock is, as a result, removed from the open market which could potentially be owned by other investors for long term rental purposes. This, in turn, has not only reduced the number of rental houses available in the rental market for the Londoners but has also substantially increased the rental prices of those rental houses that remain in the market and hence the prevalence of the current crisis. For instance, in 2015, data from the Office for National Statistics referenced the basic economic theory and evidenced that the housing prices in London were on an average of 42% higher that their peak in 2007.

Some of the concepts that have been endorsed by the United Kingdoms government have also seen the current housing crisis in the nation. Some of these projects and concepts are such as the domineering Campaign to Protect Rural England (CPRE) and the National Trust, among others. The propagation of these campaigns has seen a formidable obstacle to the initialization of any form of housing and construction of the green belt. In the same vein, these campaigns have protected the countryside from substantial development since the 1950s. As a result, vast areas of the nation are out of bounds for construction, and this is evidenced by the fact that only 13% of the land in the UK is built on. This, in essence, creates massive pressure on the already existing and overcrowded housing in the urban areas and hence the housing prices inevitably go up (Pallister, 2015).

Successive government policies, on the other hand, have been a cause of the current housing crisis. Pacione, (2005) points out that the housing tenure in the UK is divided into three broad sections. These are, the private renting, the owner-occupier and the social housing. With this put to consideration, he contends that over the past couple of decades, these government policies have altered this particular tenure and changed it from the predominantly renting culture in the 1950s to a massive expectation of owner-occupier by the 1970s. Despite the fact that these policies were primarily aimed at reducing the overall public spending on houses as well as limiting the housing power of local authorities, the result has been an adverse undersupply of social housing in the United Kingdom. Thus, the unbearable pressure on the affordable real estate market (Pattison et al., 2010).

According to Tallon (2013), the UKs planning system creates a vicious deficiency in the nations housing. In the UK, the planning policy which is at the central government level is implemented by the local and the regional planners. Therefore, these policies do not necessarily reflect the release of land for construction in regard to the needs of the community. This has consequently seen an insufficient or lack of housing supply and to some extent, there are objections to proposals for housing development due to the not in my backyard syndrome that has been adopted by many (Ball, 2002). Additionally, the Localism Act which was enacted in 2012 and aimed at developing planning powers to local planners and the community as a whole has not portrayed any substantial impacts on the UKs housing supply and hence the prevalence of the current housing crisis.

The right for tenants to buy their own houses as introduced in 1980 by the Conservative Prime Minister, Margaret Thatcher, also has a lot to do with the current housing crisis. However, many scholars have argued that this right is not wrong in itself since the truth is that there have been a diminution of the ability if the local councils and authorities to build since this right did not give them the proceeds to build new housing stock (Hodkinson & Robbins, 2013). Notably, in her attempt to liberate the UK nationals from overdependence on the state, Margaret Thatcher gave the council of tenants the right to buy their houses at knockdown prices. Nonetheless, what she did not do is to give permission to these councils to spend the proceeds from sales, on building more council homes. Thus, as a result, the overall stock of the homes owned by the state has gradually gone down leading to the modern day today extensive social housing lists which have seen a majority of the poorer people in the UK to rent their residential houses from unfair private landlords. In addition, the state is left with the responsibility to regulate these rents, and as a result, the housing benefit budget has skyrocketed (Harper, 2016).

The current housing crisis in the UK can also be greatly attributed to some limiting laws in some parts of the UK. For instance, unlike the people in mainland Europe, renters in Britain have lesser rights. In Britain, for example, contracts are often short term and hence giving the landlords more power as compared to the tenants. For this reason, fees for estate and credit agents can be significantly high, and as a result, many renters feel insecure and disadvantaged, an issue which has become one of the greatest contributors to the current housing crisis. From a larger perspective, other parts of the European continent enjoy long-term renting, which is as a result of elaborate and more defined tenant rights. This being said, if renters in Britain were given more rights over their landlords, they possibly would be less desperate to have houses of their own and hence reducing demands for new mortgage loans, an issue that will probably contribute to reducing the adverse effects of the current housing crisis.

For a nation that has been greatly endorsed across the globe, as one of the best economically stable countries, the social implications of the housing costs which are soaring above the normal levels are shocking. As a matter of fact, in the city of London alone, overcrowding is extensive. Statistics have it that 11.6% of the capitals dwellings have very few residential houses for their occupants. In Newham, West London, on the other hand, the figure is up to 25.4%. Thus, with this, the insecurities and the costs that are faced by the private sector also foster the awful population agitation which forces households to move and shift against their will. The aftermath is a disruption of work, school, and also the family life for the people who are greatly in need of stability.

As aforementioned, the long-term housing problems in the UK are also accompanied by the exacerbating effects of the current governments well-being and welfare policies. The effects of these policies all culminate at the economics of their misguiding affordable rent projects. As fact would have it, these economics are instead concentrating new provisions for the less well-off in outer London areas (Saunders, 2016). Besides, as opposed to what is expected, the benefits reforms of this, so called project by the government, have caused evictions among UK's residents. Consequently, there has been an increase in the levels of homelessness in the nation while the local authorities, on the other hand, are putting in insignificant efforts to reduce the cost of tax payers.

Possible Remedies to the Current Housing Crisis

Putting into consideration all the causes of the current housing crisis in London and the UK, as mentioned above, a need for bold actions to mitigate this issue is evident. In 2013, Boris Johnson, a British politician and famous historian, contended that the availability of a housing market force that was free of debt or any other financial liabilities was the key to liberty in the domineering housing crisis. Further studies and arguments by scholars from diverse disciplines have pointed out various measures that could be employed so as to curb the overall housing nightmare in the UK. Firstly, so as to mitigate the current housing crisis, the British government ought to control the rent prices for all tenants in the nation. Currently, the housing situation in the country consists of landlords who gouge desperate tenants who are already suffering in the severely squeezed housing market. Therefore, if the government barged in and imposed some laws to limit rent rates to below the current rate of inflation, this would bring about a significant turn of events in the UKs hou...

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