The President of the Chartered Institute of Housing (CIH) opened the annual conference today with a plea to government and the wider community to make housing an economic priority to ensure the long term growth and competitiveness of the UK.
In a keynote speech to housing leaders at the annual conference in Harrogate, CIH President Paddy Gray stressed that economic recovery remained at risk from weaknesses in the housing market.
He said “We are facing a perfect storm – fewer houses being built. Increasing demand. High house prices. Increasing rental costs. There is a real risk to our economy and recovery of inaction or insufficient action.”
Drawing on analysis from the UK Housing Review Briefing (published today) Professor Gray highlighted the widening shortfall between new housing supply and ongoing demand, ongoing weaknesses in mortgage lending and increasing rental costs. He pointed out that less than one home is being built for every two needed with increasingly severe consequences.
He also confirmed that with mortgage lending constrained, more and more people are becoming part of ‘generation rent’. Professor Gray also emphasised worrying trends around the cost of living for renting households – with a new form of housing inflation becoming evident – rental inflation.
In a survey carried out by YouGov for CIH, 21 per cent of respondents overall said they were spending more running their home than they could afford – equivalent to just over 10 million people in the UK. A higher proportion of people living in private rented homes (31 per cent) said they were paying more than they could afford.
On the back of this analysis Professor Gray urged government to look more closely at the housing implications of welfare reforms for renting households.
Professor Gray welcomed government commitments to try and incentivise new house building through a new homes bonus and though planning reforms, but called on the Prime Minister to make housing a government priority and set out a clear plan to tackle a national housing crisis.