Saturday, 4 June 2011

Non-newsworthy people also affected by high housing costs

Just to add to my last post, I find it frustrating that the expense and insecurity experienced by tenants in the private rented sector is only considered really newsworthy when those tenants are frustrated would-be homeowners. There are lots of people renting privately who for all sorts of reasons are not looking to buy. Perhaps they are students, or migrant workers, or just at stage in life where they don't want or need to 'settle down'. Perhaps they like living in city-centre locations, where the flatted accommodation makes ownership less attractive. Or perhaps they are part of the large group of people who are just not very well-off and even in 'normal' times would have little or no prospect of saving up for a deposit and making the monthly payments on a mortgage.

It's not so easy to fit these groups into nice media narratives, and many of them are politically or culturally marginalised anyway. But their concerns are just as valid, and if the private rented sector is not meeting their needs then that should be just as much of a public policy priority as the frustrations of aspirant first-time buyers.

Anyway, as Tony Clements points out, any significant 'help for first-time buyers' in the form of subsidies or cheaper credit is just going to push prices up again. But tight restrictions on mortgage lending in the last two years has just displaced demand into the rental sector, pushing up rents.  As I said before, the real solution has to be increasing new supply by enough to bring down overall housing costs. The extra supply required to bend the curve of long-term housing cost growth downwards is very large, so the question of how to achieve it is a difficult one to answer. But it's one we have to face up to.

No comments:

Post a Comment

Note: only a member of this blog may post a comment.