Seems strange to think about it now, but just over a month ago the country was in the grips of a thrilling general election and, if you don’t want to know the results, look away now.
Keir Starmer’s Labour party won on a platform of a number of notable policies such as introducing a VAT charge for private schools and setting up a publicly owned British energy company.
However, the policy that most stood out to me was Labour’s approach to housing, pledging to build 1.5mn houses over the next five years.
This is very much a positive development as almost every housing expert I have spoken with during my time as a mortgage journalist has identified one consistent issue with the current UK housing landscape: the lack of houses.
The housing crisis has had many knock on effects on the market, such as lending to first-time buyers struggling to get on the housing ladder.
This is, in part, due to scarcity as house prices and deposit sizes have drastically increased over the past couple of decades, pricing out those looking to buy their first home.
In turn, this has an impact on market fluidity, leaving those who bought their first homes years ago unable to move on to larger family houses as there is no one to sell to.
It is therefore encouraging that the Labour government has pledged to build 1.5mn houses by the end of the current parliament.
If the government is able to achieve this target it seems like it will be a major shot in the arm for the UK housing market, opening up opportunities for more first-time buyers to get on the housing ladder and making the whole market more fluid.
It also seems to benefit the rental sector as, with more houses available, competition will increase, thereby offering greater choice to those without a home.
This could also lead to rents decreasing, if the recent trends seen in the Texan housing market is anything to go by.
Recently, renters in Austin, Texas have seen their rents steadily decrease after the city invested in building many more properties in the surrounding area.
While this decrease may be due to a multitude of factors and not exclusively the increase in stock, it does seem that the housing increase has contributed to this.
The Labour government’s proposal is therefore promising and would be very beneficial but, unfortunately, many people have voiced scepticism about the likeliness of this target being achieved.
In an interview with FT Adviser, Ryan Etchells, chief commercial officer at lender Together, points out that, in order to reach this number, the government will need to build 300,000 houses a year.
However, this is a similar target successive UK governments have had for “15 years” and have failed to reach as “I think they’ve managed to achieve about 150,000 one year in that period”.
