It’s sometimes tempting to imagine that many of Britain’s property issues are unique to our island home. However, one of the most interesting sessions at this week’s MIPIM conference about residential development illustrated that our approach to a shortage of affordable housing can benefit from the experience of Europe and the United States.
One significant contrast between the residential markets here and abroad is the proportion of families living in rented accommodation.
Whereas, as the saying goes, “an Englishman’s home is his castle”, our continental counterparts might choose to live in someone else’s, often because they simply can’t afford a place of their own.
Individuals’ ability to get onto the housing ladder is becoming more of a concern in the UK. The most recent figures from the Office for National Statistics (ONS) show that the average house price stands at £288,000.
As a panel of experts from Paris, London, Berlin and New York all agreed, price rises are most acute in major global cities, due in no small part to a limited supply of homes for sale.
Demand meant that values were becoming prohibitive in some places. London, for one, was described as “over-heated”.
A scarcity of housing stock presents opportunities for investment, especially - as the objective panel pointed out – in other progressive cities, such as Manchester, which still have unrealised residential promise.
Even so, residential projects present no little challenge or uncertainty for willing investors. Since 2010, there have been some 23 separate law changes relating to the taxation of such ventures.
Such a degree of legislative flux might be considered enough to cause some developers to take fright, given that they prefer stability and certain, steady returns.
That mentality was partially responsible for a clutch of developers seeking to complete deals in the hours leading up to the Chancellor of the Exchequer revealing the contents of his Budget.
That said, there are, of course, those who associate ‘uncertainty’ with ‘opportunity’.
The volume and diversity of projects being advanced by developers across the country convinces me that there is recognition of continuing potential in the domestic residential market.
It is, I believe, a commercial mindset which is essential if British families are to achieve their ambitions of home ownership and avoid the life-long rental of our European cousins becoming the norm here.