Other political parties continuously harp on about the housing shortage in the UK, even the present government; the Conservative party are pledging to invest £44 Billion to deliver 300,000 new homes a year. Labour promises to invest in a million new homes across Britain but in Engage we look at issues to identify the problems and then fix that problem with common sense solutions. The shortage of houses is not the real problem here in the UK, it is the shortage of home buyers and this has been brought about by the rent trap syndrome. This is where the real problem lies in Britain’s housing market and we need to create home buyers and then the builders will build more homes.
So why is there a shortage of home buyers?
Well for many people, especially young people, starting off in family life they, unfortunately, get caught in the rent trap. Today’s rents are actually higher than what they would actually pay on a mortgage and because they are so high, it then stops them saving up that much needed deposit money that would get them on the first rung of the property ladder. Unless both parents are working with a reasonably sized income they will never save that deposit and far too many families are caught in that predicament. This is the real problem…
So what is the solution?
There are two possible solutions to this problem and in Engage we believe that both should be implemented to ensure that the buyer’s market is increased.
Firstly the government needs to invest in far more affordable homes, even bring back the council houses so that people are not caught in a rent trap and can save up that elusive deposit. There is certainly a shortage of council houses and reintroducing them on a much larger scale will help to bring in needed funds for local government.
The other option is for those renting in the private sector. If a couple in a family household pay their rent without default for a period of three years then they have proven they can sustain a mortgage repayment of the same value as the rent they have been paying. So let them have a no deposit mortgage, if the banks refuse then the government could introduce a deposit guarantee scheme to safeguard the banks, it is not like they don’t bail them out already anyway. Then having proven they are in good standing and then giving them a deposit free mortgage it will certainly help families onto the property ladder and that will then increase not only the buyer’s market but it will, in turn, increase the builders market as well. Thus solving the housing shortage problem, we have here in Britain.
Some families may well choose to buy a lower priced property and then refurbish that older property bringing new life into old homes. If the government help people to buy their own homes it will lead to a much more vibrant society which is better for everyone all round.