Skyrocketing Housing Crisis: Labour Struggles to Address Shortage in Home Construction
In recent years, the UK has witnessed a persistent housing crisis that shows no signs of abating. The problem, exacerbated by various factors, has become a national emergency, with the government's responses falling short of addressing the issue effectively.
Net immigration has remained high, with numbers reaching as much as 900,000, and failing to drop below 400,000. This influx of people has put pressure on the housing market, leading to a potential shortage of homes for everyone.
The government's ambitious plans for green energy have driven up industrial electricity prices, making the cost of building new homes twice as high as in France and four times the cost in the US. Additionally, strict affordable housing targets for new developments have decreased incentives for developers, leading to a slump in new home constructions.
Despite the Conservative Party's (Tories) goal of building more than 1.5 million new homes during their tenure, the number of new homes started each year has remained disappointingly low. In the first quarter of this year, only 32,000 new houses were started, less than half the level needed to hit the target. Planning approvals have also collapsed to a 10-year low, with just 53,000 new homes approved in the three months to June.
Cement production in the UK is at a 72-year low and is running at half the level of 1990. The government's landfill tax, intended to help meet net-zero targets, has put an extra £20,000 on the cost of building a new home, further discouraging developers.
Under Labour, a commitment was made to build 1.5 million new homes over the parliament. However, the housing crisis continues to worsen, with prices for homes and rentals likely to increase, making it harder for people to get started on the housing ladder or find somewhere to rent.
High house prices, soaring rents, and difficulty for young people to buy their first home are major issues due to a lack of new housing. The average new home consumes five tonnes of cement, and with the housing crisis in full-scale collapse, an estimated 200,000 new homes may be built in the coming year, potentially falling to 150,000.
The housing crisis has been a contentious issue, with Angela Rayner, former deputy prime minister, resigning earlier this month, primarily due to her record as housing secretary. The crisis has become a pressing concern, with the government's only response being to impose extra taxes on the sector and set unrealistic targets.
It is evident that more housing could make homes more affordable, reduce rents, and boost growth. As the UK grapples with this crisis, finding effective solutions to increase housing supply and make homes more affordable for all remains a top priority.
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