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Affordability, or rather the lack of it, is a constant challenge for homeowners and tenants in the UK. There is a systemic lack of housing stock and the competition for what stock there is, whether to rent or to buy, is intense.<\/p>\n
This was evidenced by the fact that even in November, after the Budget had sent mortgage rates north again as markets priced in its inflationary effects, house prices rose by 1.3% according to Halifax.<\/p>\n
It seems that whatever economic, fiscal or political headwinds the property market, has to endure, house prices continue to rise.<\/p>\n
And while mortgage rates are starting to come down again after the Budget saw swap rates edge up, they are still far higher than they were for many years. They are high not just for homeowners but landlords, too, many of whom have no choice to pass the increased cost onto their tenants.<\/p>\n
The extent of the affordability problem in the UK was highlighted by shocking new data published by the Office for National Statistics in early December.<\/p>\n
It showed that the average annual disposable household income was \u00a335,000 during the financial year ending (FYE) 2023 in England. With the average house price estimated to be \u00a3298,000, that is equivalent to a ratio of 8.6 years of household income.<\/p>\n
The rest of the UK fared marginally better, with the average house price to disposable household income ratios coming in at 5.8 in Wales, 5.6 in Scotland and 5.0 in Northern Ireland in FYE 2023. But for low-income households, average-priced homes in all four countries have been \u00abunaffordable\u00bb (costing more than five years of income) for many years.<\/p>\n
In London, things were worse. Much worse. The report revealed that the average home in the capital was not affordable for any<\/em> household income decile.<\/p>\n So how do you solve a problem like affordability? One way, at least on the supply side of the equation, is with spades.<\/p>\n The Government is acutely aware of that, setting out to build 1.5m homes during the current parliament. Its plans for a radical overhaul of the planning system announced in early December are certainly a step in the right direction.<\/p>\n Planning decisions, the Ministry of Housing announced, are set to be fast-tracked in a sweeping overhaul of local planning committees \u2014 to tackle the housing crisis once and for all.<\/p>\n Under the proposals, which would come into effect under the Planning and Infrastructure Bill next year, applications that comply with local development plans could bypass planning committees entirely to tackle chronic uncertainty, unacceptable delays and unnecessary waste of time and resources.<\/p>\n The new measures will also see a national scheme of delegation introduced, the creation of streamlined committees for strategic development along with mandatory training for planning committee members. Under the new plans, local planning officers will also have an enhanced decision-making role to implement agreed planning policy.<\/p>\n At Maslow Capital, we see these changes, if the Bill is passed, as a positive move to alleviate the housing crisis \u2014 and improve affordability as a result.<\/p>\n Streamlining approvals for compliant applications should reduce delays and provide developers with greater certainty, supporting timely project delivery. A national approach to delegation could further help by addressing inconsistent decision-making across local authorities, which has historically added cost, risk and delays. If implemented effectively, this should boost housing supply, benefiting occupiers, tenants and purchasers through improved affordability in the medium to long term.<\/p>\n The impact will take time to translate into completed schemes, so immediate results should not be expected. Equally, accelerating the process should not compromise development quality or community engagement. It\u2019s crucial that red flags do not replace red tape.<\/p>\n But done right, 2025 could be a year of opportunity for developers as they are given the freedom and flexibility by government to get spades into the ground at scale. That is what the country needs and what developers are on hand to provide.<\/p>\n","protected":false},"excerpt":{"rendered":" Affordability, or rather the lack of it, is a constant challenge for homeowners and tenants in the UK. There is a systemic lack of housing stock and the competition for what stock there is, whether […]<\/p>\n","protected":false},"author":3,"featured_media":7521,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[118],"tags":[],"class_list":["post-7491","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion-pieces"],"acf":[],"yoast_head":"\n