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Section 1 – A Crisis in Context

Let's be very clear. It is not in doubt that the United Kingdom is

in the grip of a Housing Crisis. What is in doubt however are the
causes of this crisis.

Many people would attribute the crisis to the economic crash of

2008. This is a perfectly legitimate view however it does not
paint a complete picture of the changing economic and social
conditions which have led the United Kingdom into this crisis.

According to the Office of National Statistics the population of

the UK grew by 7,483,700 between 1996 and 2016 and is projected to
grow by a further 3,586,879 by 20261. Over this same period the
housing stock of the UK grew by only 3,782,000 homes. The vast
majority of these new homes were in the private rental sector
whilst the number of homes rented from councils reduced by almost

This increase in population and shift in the balance of the

housing market can be seen as a major contributing factor in the
development of the current housing crisis as the lack of cheap
rental property couple with rising house prices3 have kept the
housing sector in a state of near terminal stagnancy with the
number of private rented homes continuing to rise and two decades
of near uninterrupted price increases squeezing people off the
housing ladder.

Exacerbating the crisis is the difference in prices between

private and public rental. Private rental properties are
significantly higher than those of public sector rents, in 2018
for example the average monthly rate for a council rented home was
£3794 whereas the monthly rent in the private sector stood at an
average of £906 per month5&6. With the limited amount of public
rented council property available and the rising number of private
rental properties it has led to a significant shift, whereas once
renting whilst saving a deposit for a home was achievable it is no
longer an option for many people meaning that the rental market
itself has stagnated with tenants who previously purchased
properties after a number of years now being unable to move on.

In that same period the definition of affordable homes has

1 https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/articles/overv
2 As taken from government statistics, specifically table 102 which is available here
3 Average property prices rose from £56,630 in May 1996 to £210,872 in 2016 an almost 300% increase despite the
financial crash of 2007/8 (http://landregistry.data.gov.uk/app/ukhpi/browse?from=1991-01-01&location=http%3A
4 This is the all England average, as found from government statistics on table 702 available here
5 This figure is taken from the buy association https://www.buyassociation.co.uk/2018/03/16/what-average-rent-uk-
6 It is also worth noting that even when taking London's rental values out of the private renting average the figure is
still £758 a month, literally double that of council rented properties.
changed. Intermediate rent schemes where rents can be up to 80% of
market rate are now being classed as 'affordable'7, as are shared
ownership schemes8 and help to buy schemes9. The difficulty with
all of these options is that whilst housing prices have risen
substantially wages have not. The average annual wage in the
United Kingdom has seen anaemic growth over the past few decades,
a UK worker in 2000 received an average wage of £30,643 (adjusted
to spending power in 2017 for comparison) where as in 2017 that
same worker received £35,16310, an increase of roughly 14%. Taking
this into account none of these schemes no matter how well
intentioned are really affordable for the average worker.

Additionally we have seen an increase in the number of illegal in

cities, these offer a cheap alternative for both immigrants and
young people. Some stories of these 'homes' include being offered
where they are literally inside a shed put up in communal areas11
with several councils initiating crackdowns on illegally converted
dwellings in the last few years12

To summarise we have a market that is undergoing a rebalancing, we

have a population boom, we have a wage stagnation, illegal homes
popping up and price inflation that means people cannot get on the
housing ladder. These factors have created the perfect storm in
the UK housing market and have led to the situation we face today.

7 And actively advertised as such (https://www.sharetobuy.com/guides-and-faqs/rental-options/)

8 Which leave tenants paying both a mortgage and rent (https://www.sharetobuy.com/guides-and-faqs/what-is-shared-
9 Which advertise flashy rates and low cost deposits (https://www.helptobuy.gov.uk/)
10 https://stats.oecd.org/Index.aspx?DataSetCode=AV_AN_WAGE
11 https://www.theguardian.com/money/2015/sep/02/london-housing-crisis-480-a-month-for-a-bed-in-a-shed-in-the-
12 https://ceasefiremagazine.co.uk/north-london-council-evict-1500-tenants-unauthorised-living-industrial-warehouses/