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New Report Highlights House Price Surge by 2012
-resized.jpg "The government has said 3 million new homes will be built by 2020")
Research published on the 6th August 2007 has highlighted how house prices in England will likely exceed �300,000 by 2012. The report was issued by the National Housing Federation (NHF). Detailing how, at present, house prices were bordering on eleven times average earnings, it predicted that these could gain a further 40 per cent, in line with a decrease in demand for building supplies. In this way, the NHF stressed, the government must now implement its strategy - previously announced � in which three million new homes will be constructed by 2020. If not, then a severe crisis could develop, it added. Having said this, the federation did concede that a crash within the housing market was improbable, even though many first-time house buyers are struggling to finance the purchase of their initial property.
As detailed in the National Housing Federation�s report, a large number of those individuals or couples unable to afford a home are, instead, seeking the help of the social housing network. Consequently, waiting lists within the sector have put on 57 per cent since 2002, to now stand at 1.6 million households � equating to four million people.
The findings detailed in the report resulted from research carried out by Oxford Economics on the NHF�s behalf. One crucial factor described in it related to the house price/salary relationship � which is growing ever wider. Since 1997, when the Labour Party came back into power, house prices have increased by 156 per cent. By comparison, 35 per cent is the figure for the average wage increase, over the same period. If the pattern continues into the foreseeable future, said the report, London house prices can be expected to reach approximately �500,000 by 2012, when the capital hosts the Olympic Games. The present average for London is �318,864.
The great hike in house prices will not be confined to London by any means � Yorkshire and North Wales, both considered to be cheaper regions, will see the average home surpass the �200,000 mark.
Commenting on the report, the Chief Executive of the National Housing Federation, David Orr, said: "Our report shows that continuing house price rises and the resulting housing crisis are set to stay with us for a long time."
Although homeowners might well pick up on the more positive side of the price increases, Mr Orr continued to detail how this was not necessarily the case. "A growing number of parents will find themselves subsidising their sons' and daughters' mortgages," he stated, adding: �And, across the country, more and more people are going to find themselves priced out of the property market - and struggling to find a decent home."
To ensure the problem is tackled, the government needs to forge ahead with the construction of new homes, the report urged. Additionally, an extra 70,000 homes per annum need to be built for the purposes of social housing.
In July 2007, the government published the �Housing Green Paper�, in which the issue of new property construction was addressed. One key pledge was that in excess of 70,000 new homes would be constructed by 2011 at the latest.
Away from the NHF report, government figures have also highlighted the key house demand/supply problems prevalent across the construction industry at present. They say that demand currently exists for 210,000 new properties each year, however this figure is not being achieved, with only 165,000 actually being constructed.
Construction International will bring you further coverage regarding Britain�s housing sector and related issues of construction in future News Items.
Source - Construction International�s Housing Reporter
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