To fix the housing crisis, ministers should listen to businesses in London – scrap the migration cap and build more homes in the green belt
First-time buyers are going to extreme lengths to save up a deposit, according to an amusing survey published by Santander this morning.
“Almost 2m are willing to swap nutritious meals for pot noodles,” the bank says, inadvertently casting doubt over the future of the global avocado market.
The research also reveals that 38 per cent of wannabe-homeowners are so desperate to save money they’d even consider the horror of all horrors: namely, moving back in with their parents.
As dreadful as this sounds, there is some good news for aspiring first-time buyers, a rising number of whom are managing to secure a mortgage and jump on the housing ladder. Numbers from City lobby group UK Finance show that 25,200 new homeowners saw their mortgages signed off in February, up 2.4 per cent from a year earlier.
Read more: DEBATE: Has the time come to start building on the green belt?
Buy-to-let mortgages were down 8.8 per cent, with one industry expert crediting “a more level playing field” for encouraging new homeowners to take the place of landlords. “Realistic pricing” was also cited.
Nonetheless, while prices have slowed in areas such as London, they remain exceptionally high across the UK as a whole, hitting a fresh peak this month according to Rightmove. With millions of young people frozen out of the market the issue is still a hot topic.
Housing minister Dominc Raab attracted attention last week when he blamed immigration for driving up prices, referencing a “something like 20 per cent” increase in the cost of homeownership caused by migration over a recent 25-year period. The figure may sound high until one considers that prices rocketed by nearly 280 per cent between 1991 and 2016. Clearly other factors are having a far more serious effect.
Read more: Failure to act on green belt a “big disappointment”, Tories say
Raab, who represents a Surrey constituency, has a record of opposition towards new homes in the green belt. On this point, as well as the migration question, he finds himself at odds with businesses in the capital. The London Chambers of Commerce said this week that over two-thirds of firms support the creation of new homes on poor quality, disused or derelict green belt land.
“We all need to accept that the green belt is not all lush rolling fields,” said Chambers boss Colin Stanbridge. “Businesspeople are being realistic about what needs to be done.”
His sentiment is reasonable, and while the recent uptick in first-time buyers is welcome, businesses in London are right to remind us that far more still needs to be done.