Is the UK Government drawing away those that could help them solve the housing market crisis?
A disloyal housing market that first-time home buyers struggle to complete their purchase combined with increasing interest rates, a short supply of homes to let, and the inability to meet affordable houses by the government are just some of the challenges faced day after day by ordinary British citizens.
It is old breaking news that the housing market in the UK faces lots of challenges and the consequences are felt by all of them. But how have they come to this point and why?
According to the 2019 Conservative Manifesto, 300,000 new houses should be built every year by the mid-2020s, a target that has never been met so far. Factors like population growth, increasing migration, and young adults wanting to leave their parents’ house add extra pressure on a market that’s already struggling to supply demand, deliver quality and comply with the standards of quality states by the government.
During the pandemic, the UK Housing Market experienced a boom and homeowners saw the value of their houses skyrocket, despite going back to normal now, the consequences of the pandemic and the war in Ukraine are not making people’s lives easier.
High mortgage and interest rates, larger inflation that leads to the soaring cost of living, and the obscene amount of taxes paid to the government discourage even the wealthiest to buy houses and make them a source of income. These people are opting for alternative markets like Portugal, Miami, and Dubai and this is terrible for the UK because it means that the government will need to sort out everything on its own, which has already been proved that is very challenging.
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You might be wondering: what is the relationship between rich people being discouraged to invest in the UK and leave the country, and the short supply of affordable houses to rent/sell?
Basically, those people are who could either buy and refurbish old places or develop new properties and make them available either for rent or sale in order to fill the supply versus demand gap. Because of the amount of money they “lose” by paying huge taxes, they’d rather go to other places where they can have a higher profit margin and, sometimes, even a better life.
Unfortunately, the government hasn’t proved to be enough to solve the problem, but at the very least, it should definitely not make it harder for those who are indeed helping shorten the disparity in the UK Housing Market and making the Economy heat up. Tax incentives would be very welcomed by landlords and it would for sure ease the pain faced by those who struggle to find a place to live, let alone the pressure faced by the Government itself.