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Residential housing market gets further investment

In recent months the subject of UK residential property and affordability has become a much discussed issue in national politics and as part of public discourse in general. There have also been a raft of statistics published by both government departments and financial institutions amongst others, which all point to a residential property market which is becoming increasingly investment orientated. And indeed, both commercial and residential property have long been seen as areas of financial speculation, to the extent that one might be inclined to say, but of course, what is the residential property market about if it is not about investment, and by extension, investment returns?

This is true, the residential property market requires investors and capital, however as the election draws ever closer, the refocusing by the main political parties on issues surrounding housing illustrate that it is a subject that matters greatly to the electorate.
Only very recently Chancellor of the Exchequer George Osborne and Mayor of London Boris Johnson announced major new plans for increased investment for affordable housing projects in Greater London, designed to go some way towards increasing the critically low level of new housing stock in the capital. Of course it is also designed to appease voters but the announcement is one to be welcomed in any case, particularly from the point of view of first time buyers.

Terms like high yield, investment potential and returns all serve to attribute financial value to residential property, making it easy to forget that a house is someone’s home, a place where families grow up and where refuge is sought.
It is in this context that in the UK, the number of people who can afford to own their home has dropped to historic lows. For example, the largest traditional age group of first time buyers was 25-34 year olds. The number of this group owning their own home fell from 59% in 2004 to just 36% in 2014.

Over the same period, the proportion renting, either privately or through a local authority or housing association, increased from 41% to 64%. It is not surprising then that the rate of home ownership in the UK is at its lowest level in 30 years.
Considering these new realities the question is, are houses now considered to be assets more so than homes? Is the UK becoming a country of landlords as opposed to owner occupied home owners? And if so what does that mean for young couples and families? Obviously I don’t have the answers to these questions, food for thought nonetheless.

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