As the UK stands on the brink of Brexit, the country’s economy is plagued by uncertainty. Yet one aspect has never been clearer: the UK is suffering an unprecedented shortage of affordable housing today.
In 2017, former Chancellor of the Exchequer, Philip Hammond, announced government plans to build 300,000 new homes per year to address the growing crisis in affordable housing. Mr Hammond explained that the barriers preventing Britain’s young people getting on the property ladder are unacceptable, pledging to help the next generation by providing more affordable housing.
He set out the UK government’s commitment to deliver record levels of new homes. With the average home costing eight times the average income, house prices and rent are skyrocketing. Find out more about the UK government’s strategic plan by viewing the attached PDF.
As Chairman of the Mid Group, one of the UK’s fastest growing construction companies, Sahel Majali will be well aware of the unique investment opportunities arising in the UK housing sector. The company commenced operations in the UK in 2015, opening a new head office in the City of London. Today, the Mid Group leads the UK market in offsite construction solutions, pioneering cutting-edge digital technologies – like Building Information Modelling – to significantly increase productivity in the UK construction industry. Find out more about the Mid Group’s recent projects by viewing the attached infographic.
How Many New Homes Are Needed in the UK?
Analysts estimate that between 240,000 and 340,000 new homes per year are needed in England alone.
The housing shortage manifests itself in various ways, from increased levels of overcrowding to affordability issues. More young people in the UK are living for longer periods with their parents. Labour mobility being impaired has affected industry, meaning that businesses find it more and more difficult to recruit and retain skilled staff. The UK is also experiencing increased levels of homelessness.
In 2015, the UK Government pledged to create one million new homes by 2020. While some of these net additions have been created through new builds, others have been achieved through conversions and changes of use.
The UK government published a white paper titled Fixing Our Broken Housing Market in February 2017. It set out a comprehensive package of reform, concentrating on four key areas:
- Building the right kind of properties in the right places
- Building them faster
- Using innovative construction methods
- Helping people now by investing in affordable housing to prevent homelessness
Find out more by watching the attached video.
The UK Property Market Confers Solid Investment Opportunities
Brexit has undeniably affected the UK economy, weakening the pound. Nevertheless, this in itself has created unique investment opportunities, inviting interest from overseas investors. The Fragrance Group, a Singapore-based development company, has invested £100 million in one UK resort alone through the acquisition of four new hotels.
In terms of the residential property sector the market remains strong, for one key reason. Becoming a homeowner is an aspiration shared by many people in the UK today. The UK government has pledged its ongoing commitment to helping millions of people turn this dream into a reality.
Despite Brexit, property prices in the UK rose modestly throughout 2019. Amidst ongoing political and economic uncertainty, modest wage rises, alongside increases in mortgage approvals, have sparked greater buoyancy in the property market.
Today, the average home in the UK costs around £232,249. The latest Halifax House Price Index figures indicate that UK property prices grew by 0.9% from October 2018 to October 2019. While the market may by somewhat tempered by Brexit uncertainty, there still remains an insatiable appetite for affordable homes in the UK.