Mortgage rates are continuing to creep upwards; inflation remains stubbornly high, and cost of living pressures continue to impact us all. Mortgage lending to first-time buyers has fallen to the lowest level since the start of the pandemic, an indication that more and more aspiring homeowners are really struggling to buy a home of their own.
Housing has never been less affordable, and today’s young people are less likely to be homeowners than any generation since the 1930s. Our own research shows that 49 per cent of young people told us they doubted they’d ever be able to own a home of their own.
Worryingly, homeownership levels for 25 to 34-year-olds has fallen from 70 per cent in the 1990s to just 40 per cent now.
Whilst the reasons behind house price growth and unaffordability issues are manyfold, it’s very clear that the underlying cause of our housing crisis is the chronic shortage of new homes being built. Over the past 25 years, the population of the UK has risen by around 10 million, but we continue to build fewer homes than ever before. Just over one million new homes were built in the 2010s compared to over 3.5 million in the 1960s.
So, what is the problem?
The availability and cost of land is one of the most significant long-term barriers to building more homes of the right size and of decent quality – and all at affordable prices. UK planning policy is notoriously contentious, but we must find ways to address the crippling lack of supply.
That’s why we urgently need serious reforms of our planning system including having a proper conversation about the green belt.
The current UK green belt guidelines were introduced over 70 years ago and were designed to stop urban sprawl. The concept of having a ‘green belt’ evolved from the garden city movement founded by urban planner Ebenezer Howard.
Howard wanted to create a ring of land around ‘cities polluted by the Industrial Revolution’ so that workers would have access to fresh air and green fields. A successful campaign by the Campaign to Protect Rural England (CPRE) led to an Act of Parliament in 1938 with the creation of the first green belts around London and Sheffield.
Subsequently, almost 60 per cent of local authorities in England have now got designated green-belt land. Due to this legislation over 12 per cent of England’s land has now got the highest level of protection against development and can only be built on in exceptional circumstances.
Despite conjuring images of our green and pleasant land, the truth is that much of the green belt is neither green nor pleasant, and the rules now hinder many planning decisions. Recent research has shown that a lot of the green belt has been wrongly classified and is just a buffer between urban sprawl and the countryside.
That’s why at the beginning of June, in a House of Commons debate on delivering new homes, Conservative MP, Simon Clarke argued for areas of green belt that do not have genuine environmental value to be redesignated as ‘amber belt’.
Housing issues are becoming more important
As we approach the run-up to the next General Election, housing issues are, quite rightly, shooting up the political agenda.
The opposition Labour party says it will ‘back the builders, not the blockers’ and has announced several changes to shake up planning rules. Meanwhile, the Conservative government suggested that they might be looking for a Help to Buy style solution to drive housebuilding and to help first-time buyers.
However, what’s very clear is that much more needs to be done to help young people onto the housing ladder.
However, the facts remain bleak.
It is now the hardest time to afford a home since our founding year in 1875, a sad reflection of decades of inaction to tackle the UK’s housing crisis. Here at Leeds Building Society, we will continue to try to find ways we can help, and we will continue to put homeownership within reach of more people, just as we have for almost 150 years.
