There are over a million owner occupiers unable to sell their houses according to a survey by the Santander banking group. This is much more than the 725,000 who manage to sell their properties. This again underlines that the housing market is in a bad state. It is slowing down and there are no signs that it will change for a while yet.
This is a consequence of t buyers being unable to access mortgages.
The financial crisis put a stop on a 100 per cent mortgages now many banks and building societies are demanding a deposit of a quarter of the purchase price of a home. Many, especially first time buyers are unable to raise such high deposits. Even the current low interest payments is of little help if access to the market is denied to those seeking homes.
Alongside the downturn in owner occupation there is likely to be a slow down in the number of houses being built for the rented market. Social landlords are predicting a slow down in their activities. As the public expenditure cuts that are due to be announced in October hits their sector. These worries, as well as the changes to the Housing benefit regime, are creating a real concern amongst social landlords that they will find it difficult to help those looking for a roof over their heads.
All in all, a grim time ahead to those that require a home.
These factors will inevitably cause a rise in the number of homeless people.
Apart from the undesirable social effects of homelessness itself, it also adds to the headache of local councils. Councils have a statutory duty towards the homeless. An increase in the number of homeless people will inevitably mean a greater expenditure by local authorities in this area. More spent in one area means less in another. So ‘non’ essential services will suffer even greater cuts. So forget that new library or evening class or street flowers, they will be the first to go.
The wisdom of pushing so quickly and so hard to reduce the public sector deficit must be questioned in such circumstances. That double dip recession is looming and looks inevitable,
It may or may not put a strain on the coalition government, but it sure as hell will put a strain on the rest of us.