It is no secret that housing is at the very top of the political agenda at the moment. A lot of coverage has been generated recently about housing supply, interest rates, and access to finance, but what is to become of London’s young professionals who constitute the future of the city?
Snapdragon’s Alex Green offers some thoughts on the subject:
Just over a month ago I sat in a well attended networking event which focused on London’s future development hotspots, and listened to a panel of industry ‘experts’ muse about the future for London’s property market. The usual raft of statistics and charts were used to highlight the wonderful recovery that the capital’s property market has enjoyed over the past couple of years.
Amidst all of the back patting there was a momentary glimpse into the stark reality of the property market for young professionals. One of the panellists (a departmental director at one of the biggest property letting firms in the country) made a statement that seemed to fall on deaf ears. Paraphrasing, he said: “Young professionals in London, on a salary of between £50,000 and £80,000 are finding it hard, if not impossible, to buy property in central London.” The bad news doesn’t stop there.
On the 29th July 2014 the Metro reported that one in four working 20 to 34 year olds still live with their parents. Last year the average price for first-time buyers jumped 11.3 per cent to £202,000, with wages for the under-30s falling by 13 per cent in real terms since 2007. Crudely speaking that is a disparity of over 24 per cent.
The subject is clearly a pertinent one and numerous news outlets have picked it up over the past few months. Estates Gazette have recently launched a four month investigation into the affordability of renting in London for young professionals. A graduate surveyor has agreed to be the guinea pig and will attempt to find suitable living accommodation within London zone 2 for no more than £500 per month. The mere fact that this is a news worthy endeavour, is indicative of the problem that pervades the property market.
What is the solution? There is certainly no quick fix, but one avenue of retribution worth keeping an eye on is the increasing viability of modular, pre-constructed homes, that offer a quick construction turn around and greater affordability.
Many may think the widespread use of pre-constructed housing units is pie in the sky, but if the new housing and planning minister Brendon Lewis’ comments are anything to go by, factory constructed homes are a very real and feasible solution to the housing shortage. Lewis has indicated that one fifth of 165,000 new homes required annually to meet London’s housing need will be built through ‘advanced housing manufacturing’, i.e. pre-constructed units. A third of these homes are earmarked for London potentially allowing for 11,000 new pre-constructed homes in the capital.
The modular house building technique has recently been taken up by some of the UK’s biggest house builders and the combination of swift construction and the ability to assemble these units on a wide variety of land types, could make the prospect highly attractive for local authorities and developers a like.
London’s young professionals are being stifled by circumstances that are largely out of their control. For the future prosperity of the city let’s hope the government stick to their guns.