Britain’s housing needs to be made more habitable and cheaper (Image: Getty)
The UK has enough housing stock to go round and Britain cannot build itself out of a housing crisis, a leading asset manager which specialises in property has warned.
James Lancaster, head of corporate at residential asset manager G2M group, said the UK “cannot build its way out of a housing crisis”.
He said housing stock was not the problem rather the lack of a properly regulated private rental sector, which was dominated by landlords who regarded their properties as assets rather than social enterprises.
Lancaster said England’s rental sector was made up of 4.9 million homes, with a value of £1.3 trillon. “It is almost entirely made up of private individual landlords with a level of fragmentation, 97 per cent of our private rental homes are owned by private landlords.
G2M said the term ‘private rental sector’ was also misleading because so many privately rented homes were being subsidised by local authorities via housing benefit.
“There are 2.8 million households receiving housing benefit alone in the UK and 700,000 of these families who want to reside within the social sector now find themselves living in privately rented homes.”
He explained that 62 per cent of landlords own less than five properties, which meant the UK’s rental housing stock was fragmented and hard to regulate.
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G2M said the main cause of homelessness was often landlord eviction, and not lack of housing.
Lancaster said local authorities were also being held over a barrel by providers of temporary accommodation which was costing the taxpayer billions of pounds because those landlords overcharged for the property,
“For example, the West Yorkshire family home might rent for roughly £7,000 per year. The local authorities are instead having to pay the equivalent of £49,000 for the same family to live in temporary accommodation.”
Lancaster said over the last 20 years, England has seen a net increase of just over 4 million homes but homeownership has increased by just under 1.4 million. He said: “Britain cannot build its way out of a housing crisis.
“Despite building as aggressively as possible, a social sector made up of homes owned by local authorities, housing associations and other registered providers has seen its stock actually decreased by three per cent.”
“Since the inception of Right to Buy the social sector has been required to sell 2.1 million of its homes.
“The private rental sector over the last 20 years alone has grown by nearly 2.8 million homes, a staggering 129 per cent increase.
“If you look at the relative proportion of homeownership in the last 20 years, it has actually declined by nearly 6 per cent.
“Far from creating a nation of homeowners, we have in fact created a nation of landlords.”
“Since the inception of the right to buy in Greater Manchester, 92,000 of homes that were in the social sector have been sold.“If these homes had been still held by the social sector, and we assume an average residency of 10 years, this would create over 9000 vacant homes a year. equivalent to the temporary housing demand last year.
“Even if it is in the long term interests of the sustainability of the market. The sector needs vast institutional investment.”
“And as long as we are trying as a country to drive wealth creation through homeownership. We are always going to have these issues.”
Monique Bonney is a Swale councillor whose parish in Kent is expected to become a test case for Housing Secretary , said more house building would not solve the UK’s housing crisis.
Rayner has taken the decision about whether to go ahead with an 8,400 home development out of the local council’s hands.
Bonney said: “As a party of the people they [Labour] should be delivering affordable housing. ’s plans to build 1.5 million houses isn’t going to cut the mustard. How many of those houses are going to be affordable?”
“What we need is good affordable rented housing. Not more house building for the sake of it. Things need to properly thought out.”