Camberwell is facing a dilemma. The supply of new housing is failing to keep up with demand – a problem which is fuelled by a growing population. The average age of a Camberwell resident is 33.7 years; this can be compared to the London average of 35.6 years, and the national average of 39.4 years. Camberwell’s population growth is the result of increased life expectancy; a fairly high birth rate, compared to previous decades, and high net immigration. Each of these factors results in housing shortages and house price increases.
Figures released by Durham University, known as the UK’s leading authority for such statistics, make for interesting reading. For the Southwark London Borough Council area, the statistics and future forecasts are as follows:
The usual ratio of people to property in the UK is 2 to 1, which means that we need just over 33,000 additional new homes in the Southwark London Borough Council area over the next 20 years, in order to satisfy demand.
Focusing on the issue of population growth does not tackle the housing crisis in the short term in Camberwell. However, it does have a fundamental role to play in long-term housing development and strategy in the district. The increase in house prices in Camberwell over the last six years are mainly the result of three factors: a low number of properties coming onto the market, a lack of new properties being built and a rise in demand, particularly from landlords and buy to let investors.
When this topic comes up in conversation, people often talk about the need to improve supply and suggest building new properties as the answer. This solution overlooks the subject of accumulative demand from population growth. Across the UK, the percentage of 25-34 year olds who own their own home has dropped dramatically from 66.7 in 1987 to 43.8 in 2014. Meanwhile, 78.2% of over 65s own their own home and increased life expectancy mean houses remain in the same hands for longer.
Increased population growth has resulted in a rise in competition for properties among the younger generations. It may surprise some readers to hear that 98% of all land in the UK is used for either commercial, industrial or agricultural purposes. This means that a mere 2% is used for housing. This realisation might lead some to advocate the expanding of homebuilding schemes by building on green belt land. However, most politicians haven’t got the stomach to open that can of worms, especially in the Tory’ strongholds of the Southern England, where demand is the greatest. People mention brownfield sites, but recent research suggests there aren’t as many sites to build on, especially in Camberwell, where 33,000 properties are needed in the next 20 years.
In the short to medium term, demand for a roof over of one’s head will continue to grow in Camberwell. Such appetite for accommodation can only be met by the private rental sector – good news for homeowners and landlords as that keeps property prices higher.
Taking a longer term perspective, local and national governments need to realise that these millions of additional people need to live somewhere. This issue urgently needs to be tackled, through the building of properties in a sustainable and environmentally friendly way. For more thoughts on the Camberwell Property market just give me a call or subscribe to this blog.