Housing Crisis in London and UK

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Added on 2020-05-28

Housing Crisis in London and UK

Added on 2020-05-28

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Running Head: HOUSING CRISIS 1Main Causes of Current Housing Crisis in London and the UK

Housing crisis in the UK 2Housing crisis refers to the shortage of the affordable and properly equipped housing for the people. In several parts of London and the UK, a severe crisis of the housing supply has occurred. It has most severely hit London and the South East of the UK. The housing crisis in London is not the shortage of the supply of the living homes but it is the shortage of the supply of affordable homes. Developing affordable housing is quite a challenge in the global cities like London as the demand for the new homes is global whereas the supply is local (Brooker, 2017). Due to the migration, the output of the new homes is well below the required. According to the reports, the annual requirements of the new homes are between 240,000 and 280,000 a year (Bowie, 2017). In London, the housing requirement is approximately 62,000 homes per year; however, the numbers of homes, which are constructed, are between 15,000 and 18,000 (Bowie, 2017). There are significant numbers of people who are unable to access the home market. The statisticsshow the severity of the housing crisis in London. It can be critiqued that there is huge gap between housing supply and demand in the country. Housing facility and the housing policy are the main parts of the state welfare and the state policy. Housing is a basic need and it is essential to deliver it before health and education as the primary human requirement. As it is primary need, the state has intervened in a number of ways as a part of the housing market. Several housing policies have been made as a part of government intervention to modify the housing market (Lund, 2017). In this regard, the present essay will discuss the major causes of the housing supply deficit in London and the UK.

Housing crisis in the UK 3The housing supply deficit is the major cause of concern of the government in London and other regions of the UK. Most of the middle-class people are struggling with the housing loans and the extremely high cost of the housing property. The people are unable to apply for the housing loans or buy homes at the posh city of London. Moreover, the rent of different apartments is veryhigh which is eating up the finances of the people. The migrants and the foreign workers are unable to purchase an apartment or rent a well-conditioned apartment. These people are forced tocoexist with other people or live at roads. It is a social issue, which indicates the bad living conditions in the city. Although there are numbers of luxury balcony apartments, there are extremely costly and can be bought only by billionaires, super-rich, and alpha-elites global investors. These foreign investors are attracted by the tax-friendly environment of the country. These are wealthy places, which is home to the richest people all across the globe. The foreign investors are frequently investing in the real estate of the country, which is increasing the cost of the apartments and houses. In the past, like other parts of London, these were mixed areas. It means that both wealthy and middle-class people reside their together. However, the middle-class and poor people were displaced from the central parts of London to the periphery or out of the city (Hilber, 2015). This reason has increased the prices of the houses drastically. Although there is a housing crisis in the country, there has been a simultaneous construction, in which a large number of luxury residential towers have been constructed in the country. The affordable housing has been replaced by the luxury towers, which are empty due to their high cost. The housing crisis in the country does not affect the poorest or financially weaker sections,

Housing crisis in the UK 4but it also affect the significant amount of city dwellers who cannot buy properties and extortionate rent. The housing market shows the position of the UK in the world economy. The international economic developments and the 2008 recession affect the housing market of the country. The housing market is the part of the UK economy as the growth in the house prices in both primary and the secondary market is driven by the consumer demand. In the present economy, the potential consumers are both home dwellers as well as the investors. The retail developers and the retail investors have also played a critical role in the housing crisis in the UK. Before developing housing colony or the housing society, the retail developers have to take the consent of the government for the development of the residential colony. However, these retail developers do not take the permission and the licensers when they need it but when they consider that the price of the property will be maximum. Several times, the residential planning consent is taken by the retail investors; however, they do not consider developing the colony themselves. They investors are interested in increasing the value of the land or the property in an optimal time and sell it to the investors. It can be critiqued that the optimal time is not the time when the price of the property is minimal but at the time, when the investor can attain maximum profit. In the determination of the housing price, the financers of the retail developers also play a critical role. The developers build the housing projects and open them for sales, when they consider that they can avail maximum profit from it (Dorling, 2014). In the housing projects, the retailers need finances to buy land, prepare the development proposal, and build the houses.

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