“A generation has been locked out of the housing market”.
These were the words uttered by former Housing Secretary,
Sajid Javid, who admitted
the stark reality earlier this year. With housing prices soaring over the last
5-10 years, buying homes has become unaffordable for large swathes of the
British population. Renting is the only feasible option.
A BBC report that “up to a third of millennials 'face renting their entire life'” correlates with the research we have conducted here at Morar HPI, where we have been tracking and analysing how the public feels about the economic climate since 2009. The results from our most recent wave of tracking highlights the magnitude of the housing crisis, which appears to be one of the most divisive and topical issues families are facing. According to our Consumer Compass data, more than 1 in 5 consumers labelled housing shortages and the lack of affordable homes as the most fundamental issue.
The geographical implications relating to cost of living in the UK is startling. In the first quarter of 2018, the standardised house price in London was £430,749, compared to the average of £125,000 in Northern Ireland. This resonates with Morar HPI’s Consumer Compass data, in which consumers pinpointed increasing prices as the source of housing issues, particularly in the Greater London, South-East and South-West regions in the UK.
Moreover, DIY brands are also struggling in the midst of the housing crisis, as shown by a stream of reported losses and profit falls. Sky News reports that:
“Kingfisher, owner of the UK's largest DIY chain B&Q, saw its share price melt last month after reporting a 2.8% fall in full year like-for-like sales at the business - intensifying to a 5% drop during the final three months of 2017.”
This has been attributed partly
to the recent bad weather, as well as the change in consumer spending - with people tending to be more cautious when they spend their
money. Our data would support this, with
40% of consumers saying they are currently less confident about their overall
financial situation compared to a couple of months ago. This is combined with the reality
that if people are renting flats and homes, they aren’t primarily looking to spend
Overall, despite the government setting a target of building 300,000 new homes a year - it is clear that millennials and young families will still find it difficult to purchase their first house. I think the message from many, certainly of my generation is clear: support potential homeowners by doing more to alleviate the housing shortfall.
At Morar HPI we design solutions that enable clients to access the true voice of the consumer. The result is confident decision-making based on reliable and accurate insights. To find out more please contact our Divisional Director, Caroline Hawkings or myself.