Short­age of homes could reach 1m

Kentish Gazette Canterbury & District - East Kent Property - - New Homes -

The un­der­ly­ing shor tage of homes in Eng­land could reach dan­ger­ously high lev­els of more than 1 mil­lion in less than two years, ac­cord­ing to David Pretty, chair­man of the New Homes Mar­ket­ing Board. While the proper ty mar­ket is likely to re­main de­pressed for some time, it will g rad­u­ally im­prove when more mor tgage fund­ing be­comes avail­able. This pent-up de­mand will then be re­leased into a mar­ket un­able to sat­isfy the na­tion’s hous­ing needs, said Mr Pretty, po­ten­tially send­ing prices surg­ing back up­wards: “There is a very real pos­si­bil­ity that proper ty prices, which have fallen 15 per cent or more, could rise back to 2007 lev­els within five years. Th­ese sor t of pres­sures in­vari­ably hap­pen to any mar­ket when de­mand far out­strips avail­able sup­ply. “The re­al­ity is that we are form­ing house­holds at the rate of around 230,000 each and ev­ery year – that is the level we need to meet. But we haven’t built in any­where near those quan­ti­ties for many years, so we now have a se­ri­ous back­log which con­tin­ues to build up. “As we have only been build­ing, at best, an av­er­age of around 160,000 per year in the last decade – a fig­ure which is likely to col­lapse this year and next to around 75,000 a year – the arith­metic is stark: by 2010, pent-up de­mand for homes to buy, to rent and for so­cial hous­ing could well be over 1 mil­lion, and that is dan­ger­ously high. “The big­gest im­pact of up­ward price pres­sures would be felt by the be­lea­guered first-timers who missed out in the boom, when prices were out of reach, and are now miss­ing out again be­cause, de­spite prices be­ing much more af­ford­able, mor tgage fund­ing and in­ter­est rates are still so far be­yond reach that they are worse off than ever. “We must not al­low first-time buy­ers to be for­got­ten.They are ab­so­lutely cru­cial for the gen­eral health of the hous­ing mar­ket and our fu­ture eco­nomic pros­per­ity,” he said.

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