Housing Crisis in London and UK
Added on - 28 May 2020
Showing pages 1 to 4 of 11 pages
Running Head: HOUSING CRISIS1Main Causes of Current Housing Crisis in London and the UK
Housing crisis in the UK2Housing crisis refers to the shortage of the affordable and properly equipped housing forthe people. In several parts of London and the UK, a severe crisis of the housing supply hasoccurred. It has most severely hit London and the South East of the UK. The housing crisis inLondon is not the shortage of the supply of the living homes but it is the shortage of the supplyof affordable homes. Developing affordable housing is quite a challenge in the global cities likeLondon 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 thereports, 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 gapbetween housing supply and demand in the country. Housing facility and the housing policy arethe main parts of the state welfare and the state policy. Housing is a basic need and it is essentialto deliver it before health and education as the primary human requirement. As it is primaryneed, the state has intervened in a number of ways as a part of the housing market. Severalhousing policies have been made as a part of government intervention to modify the housingmarket (Lund, 2017). In this regard, the present essay will discuss the major causes of thehousing supply deficit in London and the UK.
Housing crisis in the UK3The housing supply deficit is the major cause of concern of the government in London and otherregions of the UK. Most of the middle-class people are struggling with the housing loans and theextremely high cost of the housing property. The people are unable to apply for the housingloans 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 areunable 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 livingconditions in the city.Although there are numbers of luxury balcony apartments, there are extremely costly and can bebought only by billionaires, super-rich, and alpha-elites global investors. These foreign investorsare attracted by the tax-friendly environment of the country. These are wealthy places, which ishome to the richest people all across the globe. The foreign investors are frequently investing inthe real estate of the country, which is increasing the cost of the apartments and houses. In thepast, 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 displacedfrom the central parts of London to the periphery or out of the city (Hilber, 2015). This reasonhas increased the prices of the houses drastically.Although there is a housing crisis in the country, there has been a simultaneous construction, inwhich a large number of luxury residential towers have been constructed in the country. Theaffordable housing has been replaced by the luxury towers, which are empty due to their highcost. The housing crisis in the country does not affect the poorest or financially weaker sections,
Housing crisis in the UK4but it also affect the significant amount of city dwellers who cannot buy properties andextortionate rent.The housing market shows the position of the UK in the world economy. The internationaleconomic developments and the 2008 recession affect the housing market of the country. Thehousing market is the part of the UK economy as the growth in the house prices in both primaryand the secondary market is driven by the consumer demand. In the present economy, thepotential 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 crisisin the UK. Before developing housing colony or the housing society, the retail developers haveto 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 whenthey consider that the price of the property will be maximum. Several times, the residentialplanning consent is taken by the retail investors; however, they do not consider developing thecolony themselves. They investors are interested in increasing the value of the land or theproperty in an optimal time and sell it to the investors. It can be critiqued that the optimal time isnot the time when the price of the property is minimal but at the time, when the investor canattain maximum profit. In the determination of the housing price, the financers of the retaildevelopers also play a critical role. The developers build the housing projects and open them forsales, when they consider that they can avail maximum profit from it (Dorling, 2014). In thehousing projects, the retailers need finances to buy land, prepare the development proposal, andbuild the houses.