Is the Housing market glass half empty.. or does the cup runneth over

 Part 1.

We are in a housing crisis, the media tells us this on a daily basis, Shelter tell us this ( so it must be true, right)

But what is the real cause of the housing shortage, is it genuinely a lack of properties for people to live in

Government council tax base figures released in November 2021, recorded there are 238,306 homes in England that are classed as long-term empty homes. This means that they have been left vacant for more than six months.

According to recent Shelter figures More than 274,000 people are homeless in England in 2022

During the Autumn Budget, the chancellor, Rishi Sunak, announced that up to 180,000 new and affordable homes will be built annually.

Now I am NOT good at maths… but that would tell me that is we brought back into use the current empty homes, then the new and affordably homes build would only need to be 35,694, that’s only 19.8% of Rishis promise, now that has got to be good for the tax payer.

Now I am very aware that to bring empty homes back into use, is not an over night project and will still cost money, so lets look at some average costings:-

·         Building cost in England for a new build property are between £1,750 and £3,000 per m2

·         the floor area of the average new three-bedroom home in the UK is 88 sq m

·         So, the average cost of a New build 3 bed house at the lowest end would be £154,000

·         The average total cost of renovating an existing empty 3-bedroom house is around £76,900

Empty Housing (England) briefing paper was published 21 October 2020 to set out how empty homes could be brought back into the housing market…. But like all great Bills this one never made it across the line.

In contrast the Scots are, as usual way ahead of the property game with the release of the Scottish Empty Homes Partnership (SEHP). This provides tools for developers who wish to bring an empty property back to life, including a really helpful Empty Home Value tool

In the first year of reporting figures SEHP, saw number of empty homes reduced by 7.5% all of these properties where brought back into use either in the private or social sector.

Would the Governments money not be better spent paying towards refurbing empty homes, rather than flooding the market with new build properties that are actually affordable to the average Jo.

Lets look at rental prices

Office of National Statistics found for April 2022 states the average rent in the UK is now at £1,103, up 10.6% on the same time last year

Early estimates for April 2022 indicate that median monthly pay was £2,076.

Now to qualify for a rental property, most letting agents and landlords look for the tenant to have an income of 3 times the annual rent or around 36% percent of income to be spent on rent.

But with these figures the average tenant would be paying 41.5% of their gross income on rent, meaning a person or couple with the average annual wage of £31,887.88 can’t actually afford the average home.

So are we pricing tenants out of the housing market?................