The UK housebuilding market has had a tough six years and there is no doubt that the British housebuilding industry is in a major crisis.
Not only have property prices fallen dramatically in many parts of the country, putting many people in negative equity, but also the price reductions haven't triggered any sort of boom in the housing market as people are struggling to raise deposits or obtain a mortgage from the banks.
Any form of drop in the market is not going to have any benefit to the industry if people still can't raise the funds to buy them. Demand for homes is now at an all-time high, but the number of new homes being built is less than half the number the country requires. With a staggering level of demand and such a low level of supply, the price of each home is over-inflated and quite often unaffordable for most people who want to take their first step onto the property ladder.
For decades we have been FAILING to build the number of homes we need. The government itself says we need to build nearly 300,000 new homes each year to meet the current demand, but we've never been remotely close to that figure. In 2008 the number of homes we started building in the UK was the lowest peacetime level since 1924! In 2010 we completed only 102,830 homes, that's a third of the amount required.
We built more homes each year in the final decade of Queen Victoria's reign when the population was half the size. We really have got ourselves in a mess.
The government is now putting schemes in place to turn the new-build housing industry around. The Help to Buy equity loan scheme will provide £3.5bn of additional investment to help people into homeownership. The scheme will help up to 74,000 homebuyers, as well as providing a boost to the UK's construction sector. First-time buyers and home movers can apply for an equity loan to purchase a new-build home up to the value of £600,000.
Basically the government will give you a loan for up to 20% of the price of the home. You need to contribute at least 5% of the property price as a deposit, so this means if you are granted the 20% loan from the government then you only need a 75% mortgage from the bank.
The scheme has been criticised by some in the industry because they are worried that if you allow funding to become easier then you are increasing demand, but not increasing the supply.
In some ways I agree with this, but developers are only going to increase their supply if there is a demand so we have to start somewhere.
The key to solving the housing crisis has to be more holistic and tackle the issues of both supply and demand. Firstly, we need to build a greater number of new-build homes, which will hopefully reduce the individual unit price of each home by increasing the supply. This will mean that overall, people need to borrow less money in order to purchase the home they want.
At the same time as increasing the supply, if we make it easier for people to access low-cost loans and mortgages then they will have the funds available to purchase the increased number of lower-priced homes that are built. The Help to Buy scheme is certainly a step in the right direction and has increased the sales of new-build homes since its launch in March of this year.
What I've been up to
What an incredibly busy year I'm having this year. I'm in the middle of making series 4 and series 5 of ‘Restoration Man', which will be transmitted on Channel 4 in Spring 2014 and 2015. I'm also making series 2 of ‘George Clarke's Amazing Spaces', which you can see in October. I've also written a book for the series that will be published at the same time the series is transmitted.
I'm still advising the government to turn the tide of the Empty Homes crisis in Britain and I'm now advising on housing policy generally. While doing all of this I'm running my architectural practice, building company and property development firm. Thankfully I've got amazing people around me to make it all work.