Homes May Cost Ten Times Income By 2026
A government sponsored think-tank has estimated that unless the supply of new housing is increased immediately, a home may cost on average ten times your income by 2026. While the report has taken into account trends in the property market and buoyant prices, the supply and demand factor is probably the most important point to consider.
For many years now the number of houses being built on an annual basis has always been substantially less than the number of houses required. This trend has led to the large swings which we see in the housing market, the so called “boom and bust†scenario. If the government, local authorities and house builders were to work together they could increase the output of new homes to soak up some of the excess demand. But will the builders play the game?
Unfortunately there is little real chance of the private building companies actually agreeing to increase year on year output because this would effect the prices they could charge - more supply equals less excess demand which means softer prices. However, the government could instigate their own house building program to ease the demand, and supply affordable housing to the masses.
It remains to be seen whether any real action will be taken, but it is obvious that the markets cannot continue on as they have been for much longer.
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