Shared equity and ownership key to improved housing supply
The call came in a keynote presentation by mortgage market consultant Phil Jenks at last week’s British New Homes Mortgage Senate hosted by Your Mortgage sister title Mortgage Solutions that highlighted some of the core issues underpinning the growing gulf between the supply and demand for properties in this country.
“Mainstream lenders need to treat affordable purchase as mainstream,” said Jenks, “and face into shared ownership, shared equity and S106 issues.”
Although the UK has halted the decline in the amount of land that is available for building, it has failed to increase the number of new properties to anything like the figure needed. In only one year since 1988 has the number of new homes exceeded 150,000 (2007). This is way short of what is required as Jenks explained: “With consensus estimates of annual new build requirements in excess of 200,000 units and nearer 250,000, the private sector looks incapable of delivering.”
Jenks said not only is the UK not building enough homes, but it also seems to be out of kilter with other countries on the size of properties being built.
Figures collated by Demographia.com show the average size of a new build property in the UK is 818 square feet. This compares with an average of 2,217 square feet in Australia and 1,894 square feet in New Zealand. Closer to home, Denmark, the Netherlands and Belgium averaged between 1,475 square feet and 1,249 square feet.
Additionally the UK lags way behind when it comes to the percentage of properties that are self-commissioned, self-procured or self-built with less that 20% falling into this category. This is in stark contrast to over 80% in Austria while Belgium, Italy, Sweden Norway, Germany and France are all above 60%.
In light of this Jenks challenged the industry to come up with a solution to help the self-build market move forward and begin to alleviate some of the pressure in the housing market.