Understand more about what affordability is and its consequences

Ironically, lower interest rates, coupled with easy access to personal loans, have caused the value of unsecured personal credit to rise to as much as 22.5% over the last five years, which will reduce the affordability of ownership for many. In 2018, the affordability it leveled off after five years of declines, but is still much worse than pre-recession levels some 20 years ago.

Of course in this, as in many other things, the UK is a bit of a quilt. The affordability The price of housing ranges from the lowest in Copeland, in the North West of England, where it is 2.5 times the average income in the workplace, to Kensington and Chelsea in London, where the average price of housing is 45 times greater.

These figures concern me in the same way that climate change worries Mrs Long-Bailey. While it seems reassuring to believe that we are past the housing price recession, the numbers underscore the huge impact that the pre-recession housing boom of the mid-to-late 2000s had on the housing market and the long shadow it continues to cast across the country.

Strict

The affordability It's still a problem for many because banks and building societies burned their fingers so badly on property "bad debt" that they now apply much stricter lending criteria, which has limited home lending, although this has improved the stability of the housing market.

However, while it has become more difficult to obtain a mortgage, the substantial increase in unsecured personal loans points to a growing demand for funds that could limit future home loans. And while the data doesn't separate homeowner and renter loans, it should be safe to assume that much of these unsecured loans are being used by owner-occupiers.

The demand for housing will continue to grow as the population increases, and in this scenario there are only two ways to improve the affordability: increase the supply of inventory or ensure that income increases at a faster rate than house prices. The latter is extremely unlikely, which means that a higher supply is essential.

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Therefore, a coordinated approach to building more affordable housing and increasing the number of affordable housing in general, with increased financial and regulatory stimulus for housing construction, would help alleviate overall demand in the sector and produce steady growth. , more than exceptional, which is the true mark of success in the real estate market.

The key to that success lies in maintaining a market that remains vibrant and dynamic without becoming a runaway “winner-take-all” scenario. Only a few speculators want to boom and bust again, but there must be incentives that allow the emerging generation to consider home ownership as an achievable goal.

Stability balancing has been managed quite effectively since 2008 and I wouldn't want to upset that apple cart. However, a slight relaxation of mortgage lending criteria (i.e. deposits and income loan requirements) could open the door for more homeownership hopefuls without a return to the recklessness that blocked the market in the early years of this century.