The ‘Housing in England: An Overview,’ a report prepared by the National Audit Office of the UK brings to light the seriousness of the housing crisis faced by the country. It has recommended the speeding up of housing delivery on a priority basis if the gap between the demand and supply must be reduced in quick time.

houseing crisis

Noting that the demand for housing has risen since the 1980s, the report observes that the public-sector housebuilding has fallen over the years. Therefore, the pressure on housing delivery has increased. It also brings to fore the vulnerability of the private sector housing to economic changes and cost implications on house buyers. This has been a major concern in the recent times, as housing inflation has kept several prospective house buyers outside the housing network.

Between 2001 and 2011, approximately 144,000 new homes were built in the UK as against 244,000 in the 1970s. The demand for housing is so high in the UK, especially in London, that the current level of house building activity must be elevated to the next level.

The report indirectly points fingers at the lack of timely interventions to tackle the housing crisis. For instance, while the number of owner-occupied homes increased from 14.7 million in 2015 from 10.5 million in 1981, the number of local authority and housing associations homes has fallen from 5.5 million to 4 million in the last 34 years.

The National Audit Office also highlights the plight of the first-time home-buyers in the UK. Today, first-time buyers pay deposits of 21 percent on average, compared with 13 percent in 1990. The amount that first-time buyers must borrow to buy their first home has risen from 2.3 times the average income in 2000 to 3.2 times income in 2014.

Pointing out that the government housing policies may have conflicting objectives, it has recommended the elimination of such approaches. It has cited several such examples – in July 2015, the government reduced the rent rates collected by the housing associations and Councils. This led to a strain on public sector housing delivery, as the ability of the housing associations to finance construction of new houses was restricted.

The National Audit Office has recommended to the government to take up house-building activities across the country to control the housing crisis. At the same time, it has appreciated some of the recent initiatives of the government to tackle housing. But is that sufficient? We need to wait and watch if these initiatives alone are sufficient to handle the crisis.


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