More than two-thirds of government spending on house-buying incentive programmes, such as Help to Buy, may have boosted demand for property, but they have failed to increase the supply of much needed housing stock, adding to the supply-demand imbalance that continues to exert significant upward pressure on house prices, it has been claimed.
Shelter has slammed the government for devoting the majority of its property funding to house-buying incentive programmes, such as Help to Buy and the Lifetime ISA, rather than focus more on increasing the supply of housing stock, including affordable housing.
The housing charity argues that the government’s housing strategy has simply pushed up demand to buy property, increasing house prices in the process, while failing to address the chronic shortage of homes across the country.
The latest figures from Nationwide show that residential property prices continued to increase in August – up 0.6% month-on-month to an average of £206,145, thanks largely to a fall in the number of homes being put up for sale.
Nationwide’s chief economist, Robert Gardner, said: “Surveyors report that instructions to sell have declined and the stock of properties on the market remains close to 30 year lows. This helps to explain why the pace of house price growth has remained broadly stable.”
Peter Jefferys, a senior policy analyst at Shelter, told the Daily Telegraph this week that Theresa May’s government has the opportunity to stimulate housebuilding to increase supply, which will also help the economy, but this can only be done if there is significant reform of the housebuilding sector, including local authority planning divisions.
Last year, around 120,000 new homes were built across the UK, which is less than half the 250,000 or so the government says is needed to help solve the existing housing crisis.
Overall, the UK has missed its housebuilding targets by a staggering 1,199,180 since 2004, recent figures from Yorkshire Building Society revealed.