Soaring demand from homebuyers exceed the supply of properties is creating a housing crisis with rising prices.
London leads the demand for new properties for sale and needs another 50,000 new homes to meet its growing population currently at 8.3 million.
By 2040 London’s population is expected to reach 10 million an increase of 1.6 million but new house construction is averaging only 28,500 creating a serious shortfall.
This increases pressure on first time buyers to afford their first property and home movers with a growing family to find their next house.
Surveyors call for action
The Royal Institution of Chartered Surveyors (Rics) indicates there are not enough homes being built across the country.
Simon Rubinsohn of Rics has said that the number of homes currently for sale is far below the level of demand.
The lack of new homes could mean remortgage buyers staying in their current property and increasing their mortgage to releasing capital which they can use to improve their home.
After taking the opinion of 300 chartered surveyors across the country Rics reported in October that price rises outnumbered no rises by the greatest margin since 2002.
Enormous pressure on housing
The lacking of housing in London could compromise the city’s ability to compete as first time buyers are priced out of the market, unable to get a mortgage.
There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and agree a lifetime mortgage to access cash from their home.
Further pressure comes from buy-to-let investors able to place a large deposit for smaller rentable properties and a limited number of larger properties for home movers to buy.
Young professional unable to afford buying a property have to consider living at their parents home, joining large waiting lists for council properties or renting further out of London in order to work in the city.
The lack of supply is leading to a housing crisis that can fuel the next house price bubble at a time when London is seen as the best city for skilled workers.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to consolidate debt, home improvements or gifting to a family member.
Learn more by using the equity release calculator, property value tracker chart and mortgage cost calculator. Start with a free mortgage quote or call us and we can take your details.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
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