£56m a year black hole in the Basingstoke Property Market

Since the time when Margaret Thatcher first announced that everyone should own their own home in 1971, the percentage of people who owned their own home grew from 50% in 1971 to 69% in 2001. Since then, there has been a steady decline, with the figure at just 64.8% in 2015.

This has been partly driven by rising house prices, partly by the increase needed in the deposit first time buyers need to find, and party because Basingstoke first time buyers were in competition with Basingstoke landlords to buy these smaller starter homes, pushing house prices up in the 2000’s beyond the reach of first time buyers. Many other factors have also impacted this of course, such as economics, the banks and government policy.

Despite the rhetoric from the government and certain charities, I believe that the landlords of the 5,499 Basingstoke rental properties are making many positive contributions to Basingstoke and the people of Basingstoke. Basingstoke (and the rest of the UK) is not building enough properties to keep up with the demand; with high birth rate, job mobility, growing population and longer life expectancy.

There has also been a growing trend of tenants staying longer in rental properties, particularly the family homes, resulting in fewer properties finding their way back onto the market. As a result, there has been a steady decline in the number of available rental properties, contributing to increased prices and increased rental values.

 

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

 
It doesn’t sound like a big difference, until you look at the actual figures for Basingstoke.
 
For Basingstoke to meet its obligation on the building of new homes, Basingstoke would need to build 386 new households each year. Yet, we missed that figure by around 161 new homes in 2016 and even more than this is prior years.

For the Government to buy the land and build those additional 161 households, it would need to spend £56,181,352 a year in Basingstoke alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be sold or rented privately to Basingstoke families or Basingstoke people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. If the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade, where would these tenants be living now?