In August 2021, property listings on Zoopla were down 26% from the same period in 2020. More recently, Savills have predicted that houses built annually will not return to pre-pandemic levels until 2026.
What has caused this housing shortage?
A Shortage Predating the Pandemic
While most circumstances have been exacerbated by COVID, the UK was facing a growing housing shortage way before 2020. Studies had been released showing how population growth had outpaced housing growth.
For example from 1980 to 2018, 29,430 homes were built in Cambridge and Oxford. In that time, the population there grew by 95,079.
Falling Short of Government Targets
Boris Johnson’s government pledged to build 300,000 new homes in their 2019 manifesto. However, through a number of circumstances including party backlash, builder shortages, and existing pandemic limitations, the Government is falling short of the target.
That is despite 50,000 homes being built in the first quarter of 2021 – a 20-year record.
Record High Demand in 2021
The mix of boosted savings via furlough, the stamp duty land tax holiday, and increased demand for family homes has led to a surge in housing demand. In fact, Zoopla has stated that the average time taken between listing and agreed sale is now 26 days. In 2019, that period was 46 days.
The Effects of the Building Safety Crisis
Due to changes in building safety standards after the Grenfell tragedy, money from housing providers is now being diverted to repairs. Combustible cladding and fire safety defects are being replaced across the UK, with some providers estimating they will still need to spend £3 billion on repairs.
Not only does this mean a lack of new houses being built by these providers, but other homes are being rendered redundant and valueless.