Property expert issues warning over UK housing crisis

Property expert issues warning over UK housing crisis – ‘things are going to get worse’ Here, in a devastating prediction, property expert Jonathan Rolande delivers a sobering warning – things are going to get worse. Few things in life are as important as the roof above your head. But for those lucky enough to own a property, the price tag it comes with is beginning to look more and more unsustainable. How unsustainable? Well, according to a National Housing Federation report out earlier this month, one in five households in England will have homes costing more than a third of their income by the end of this decade. In just six years’ time, every 33p in the pound we earn will go towards that roof above our head. So you are basically working until around lunchtime every day just to pay the rent or mortgage. Enough to put you off your sandwich, if you decide you can afford to take a break. I did some number crunching and the results really shocked me. Right now the average UK income is £32,000 gross, which is around £2,666 per month. That becomes £24,000 or £2,000 a month after tax. One in five households in England will have homes costing more than a third of their income At the same time the average house price in the UK is now £280,000 and the average monthly rent is £1,260. An average mortgage meanwhile comes in at about £185,000 which – when paid back via an interest only agreement – works out at about £920 pcm. It means the average house is now nine times average gross salary to purchase. And the average home rental is 65 percent of average net pay. Things are improving very slowly due to a combination of small wage growth and falling house prices. But those renting are not so lucky. In fact rents have increased in most places – as much as 11 percent in London. With the ‘new normal’ of higher interest rates, prices will need to fall a lot further to redress the increase which has hit affordability. But this doesn’t look likely, so rates need to fall or wages increase – or both – to help the affordability gap. If no long-term plan is put in place I fear things will get much worse. In 20 or 30 years’ time, property costs could eat into our wages to an even greater extent. The stakes here couldn’t be higher. About 310,000 children are expected to live in emergency accommodation such as B&Bs and hostels by 2045. This is more than double the 131,000 in 2021 and equates to one child in every school class in England. Most expensive streets SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info A third more families (350,000) will be on council housing waiting lists by 2030. By 2045 this will rise to 1.8 million households, up from 1.1 million in 2020, the study predicts. These statistics sound more like something from Victorian London or the aftermath of World War II, not 2023 in the 6th largest economy in the world. The ongoing crisis in available housing is only going to become more acute and it’s being driven by demographic, economic and political social factors. There has been massive population growth in the last few decades with seven million more people in England than there were in 1997. Running parallel to this we’ve seen a fall in housing stock, and a particularly large loss in levels of affordable housing. House building has simply not kept up with demand. Inflation has added to the problem too. Not only has there been massive house price inflation in recent years. More recently, cost of living inflation has made expensive houses more difficult to afford. Governments of both parties have done their bit to worsen the crisis over the years too, by either brushing the problem under the carpet or doing things that have made it worse. Trending