Due to the Brexit vote, it is likely that immigration numbers will be reduced in the coming years. But despite this, there still is an unending and severe shortage of new housing being built in the Peckham area and the UK as a whole. As the population of Peckham continues to grow this high demand versus limited supply of property (both new and old) means this imbalance along with low-interest rates will continue to support property prices in the real estate market.
In 2015 when the Tories were elected, Mr Cameron pledged to build 1,000,000 new homes by 2020. On the back of this some academics stated that if we achieved those levels of construction, the UK Housing market would balance itself out. The increased supply of property would give a chance for the younger generation to buy their own home rather than rent and all likelihood property prices would stabilise. So far the up-to-date building figures show that in the first three months of 2016, building starts were down. Nationally, in the first quarter of 2016, there were only 35,530 house building starts which were some way off the 50,000 per quarter need to hit the targets set.
Over the last 12 months, new building in the London Borough of Southwark Council area has grown 1,620 Private Builders and 240 Housing Association. In 2014/15, for every one thousand existing households in the area, an additional 10.27 homes were built. For 2015/16, that figure is now 14.32 homes built per thousand existing households. Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand, which means London Borough of Southwark Council is above the National target, the issue is the country is only building at a rate of 4.9 for every thousand existing households.
So how did we get here? It would be fair to say that Cameron and Osborne focused too much on the demand side of the housing equation. Creating the Help to Buy scheme and low deposit mortgages, to convert the ‘Generation Rent’ i.e. Peckham ‘20 / 30 somethings’ who are set to rent for the rest of their lives to ‘Generation Buy’. I would recommend the new Housing Minster, Gavin Barwell, should concentrate the Government’s efforts on building more houses. There needs to be changes to planning laws, large-scale releases of public land and more investment, as more creative solutions are required.
However, ultimately, responsibility has to rest on the shoulders of Theresa May. While our new PM has many plates to spin, evading on the housing crisis will only come at a greater cost later on. The PM has already highlighted the ‘need to do far more to get more houses built’ and arrest the decline of home ownership. You would hope that these statistics will raise the alarm bells again and persuade both residents and Councilor’s in the London Borough of Southwark Council area that housing needs to be higher on its agenda.
If you would like to know more about the Peckham property market, just give me a call.