The UK’s
reputation as a nation of homeowners is under threat, as the number of houses being built
continues to be woefully inadequate in meeting the ever-demanding needs of our
growing population. Solihull is no different in this matter and is currently
feeling the effects of this issue. As I was talking to my parents the other day
at a family get together; the subject of the Solihull Property market came up
in the conversation (after the usual weather and politics…). My parents said it
used to be that if you went out to work and did the right thing, you would
expect that would be buying a house relatively quickly over the course of your
career. You would go on holiday every year and you would save for a pension. That
was the way of things. Now however, things seem to have changed.
Back in the autumn of 2015, George
Osborne used the Autumn Statement to double the housing budget to £2bn a year from April 2018 in an
attempt to increase supply and deliver 100,000 new homes each year until
2020. The Chancellor also introduced a series of initiatives
to help get first time buyers on the housing ladder, including the contentious
Help to Buy Scheme and extending Right to Buy from not just Council tenants,
but to Housing Association tenants as well.
Now that does
all sound rather good, but the Country is only building 137,490 properties a
year (114,250 built by private builders, 21,560 built by Housing Associations
and and a paltry 1,680 council houses). If you look at the graph
(courtesy of the ONS), you will see nationally, the last time the country was
building 230,000 houses a year was in the 1970’s.
How George is
going to accomplish the feat of almost doubling house building overnight, I am
not entirely sure. Using the analogy of a greengrocer; if people want to buy
more apples (i.e. houses) in a greengrocers’
shop, giving the customers more money (i.e.
with the Help to Buy scheme), when there is not enough apples for purchase
in the first place, does not really help the situation.
Looking at
the Solihull house building figures, in the local authority area as a whole,
only 430 properties were built in the last 12 months, split between 260
privately built properties, 140 housing association properties and only 30
council houses. This amount
is simply not enough and the shortage of supply has meant Solihull property
values have continued to rise, meaning they are 5.6% higher than 12 months ago,
rising 1.2% in the last month alone.
I was
taught at school that the economics game is all about supply and demand. The demand
for Solihull property has been particularly strong for properties in the good
areas of the town and it is my considered opinion that it is likely to continue
this year, driven by growing demand among buyers. You see, Solihull’s economy is quite varied. This means activity
is expected to remain relatively strong into the early summer of 2016,
especially as some Solihull buy to let landlords try to complete purchases
ahead of the introduction of new stamp duty rules in April. With regards to
supply, we have spoken about the lack of new properties in the town holding
things back, but there is another issue. Of the existing properties already
built, the concern is the number of properties on the market and for sale. The
number of properties for sale last month in Solihull was 291, whilst 12 months
ago, that figure was 353, whilst three years ago it stood at 601… a massive drop!
With demand
for Solihull property rising, minimal new homes being built and less properties
coming onto the market, that can only mean one thing ... now is a good time to
be a homeowner or landlord in Solihull.
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