Great Britain is a global hub of international finance, so it is no surprise people are buying property in global Britain. It is surprising then that the UK does not have an exceptionally high rate of homeownership. Within Europe, the UK only ranks in 29th place for homeownership. People in Kosovo, Hungary or Romania are almost 100% able to be a homeowner; the figure in the UK is a mere 64% currently, it was much higher in the past. Homeownership in the UK peaked in 2001 at 70%.
Historically ownership was seen as a way of broadening prosperity amongst the population. At the turn of the nineteenth century, i.e. 1900, the ownership rate was circa 25%. Essentially ownership was reserved for the wealthier members of society. Following world wars one and two, the major parties reached a political consensus. The working classes, who had paid the heaviest price for society to maintain the freedom of the population and the wealth of the gentry, need a better deal. Slums were pulled down, and new homes built. The Government established public housing similar to the housing built by Cadburys etc., to accommodate their workers. So why did this housing based redistribution go into reverse?
Why the decline in homeownership?
Various factors feed into the decline of homeownership and the growth of an “amateur” landlord culture together with its associated modern-day slums.
Building desirable housing requires good land. Unfortunately, most of the desirable land is earmarked as a “green belt”, which means that the land is not for development without exceptional circumstances. The idea is well-intentioned, i.e. we would like nice green areas, and the unrestricted growth of urban sprawl is to be discouraged. However, rudimental economics indicates that this will push up house prices as the availability of land is restricted. Since 70% of the cost of a new home is the cost of the land, this factor in putting good homes out of reach and cannot be understated.
To tackle this problem, politicians of all shades chose to push housing development on “brownfield sites”. Old industrial land (slag heaps and the like) frequently in build-up areas or beside busy roads. They are contributing to the levels of ill health in these areas. In turn, the level of toxins is causing the need for road usage schemes.
Why the fudge?
The greenbelt principal came in 1947 when the population was around 41 million (1951) today;, the population is getting on for 70 million. The growth has not been even the growth rate for London being twice that of Scotland or Wales, accounting for at least some of the wild house price inflation in the southeast. So why were restrictions eased whilst the Government pursued policies to grow the population? I usually put this down to vested interests, i.e. money.
Homeowners are the first group; the home is an investment, not only a home value of great importance. Releasing agricultural land on the edges of the greenbelt would diminish the value of homeowners adjoining and general homeowners as the market is corrected.
Politicians, there are two political factors. Even with a lower homeowner level, we currently see the fallout from bursting the housing bubble would lose a substantial number of votes from homeowners. Those homeowners include lots of MPs, Councillors, Lords etc., so it is not like they have an incentive to house youngsters well.
Builders have substantial landholdings that they frequently sit on, funnily enough, taking advantage of inflation on land with planning.
On the other side of the scale, renters who would like to be owners are typically young and less likely to vote, so there is not much political capital there.
Farmers who could sell agricultural land that frequently boarders estates, again farms have no clout.
Essentially real power is vested in the status quo. Perhaps MPs with a vested interest, i.e. an owner property, should be excluded from votes. It is interesting to review those MPs who have done very nicely from the housing distortion they have created. Property empires built or simply flipping many properties in London financed by the public.
Buying Property in Global Britain, How To Get On The Property Ladder
Where you are in the country, the southeast is very expensive, so unless you are rich or want to live in a rabbit hutch, your best bet may be to look to take your skills elsewhere. Many urban areas offer affordable housing at a fraction of the Southeast— Manchester, Newcastle, Glasgow etc.
What to do when you get there? Unless you are local, you will probably be unaware of the “bad” areas to live. Check this out on the internet or find a helpful estate agent. If you are prepared to do some work, the worst house in the best street in an area is optimum to make the most efficient purchase. Make multiple low offers, e.g. offer below asking on five or more properties, and you may hit on someone desperate to sell.
To get the best mortgage available, go to a company such as Get Me My Mortgage. They can scour the market to bring you the optimum rate.