Building Houses

Conference held at the Centre for Mathematical Sciences, Cambridge

In a room full of Cambridge academics, with beards and bald heads, rucksacks full of scholarly papers, conversation full of complaint, we listened intently to a series of interesting speakers, each with a serious point to put before the audience.

Before its demise the Regional Assembly had set targets for housing in each local authority area. In Ipswich we were charged with constructing 20,000 housing units by 2021. In June the new Government decided that housing targets are best set locally, and the previous high figures have been abandoned (we're all NIMBY s at heart).

However by not building new houses we make life difficult for the working population. Broadly speaking, as the economy contracts, older people choose to stay put rather than move house. On retirement (or soon after) a fair number of people choose to move to the country, the seaside or to downsize. But whilst the value of their property is less than it was in the summer of2007, there is a reluctance to sell; thus the property ladder sticks. This simple premise is compounded by an increase in the older population (the baby boomer generation are now retiring), more and more people are separating and living in two separate housing units, and people are living longer. Take for example the number of people per house:

2001-2.38 2009-2.31 2031-estimated 2.17

Well over 90% of the older population live in mainstream housing, occupying less than the available number of bedrooms. The demographic shift means that households are getting smaller, the number of housing units with single occupancy is rising sharply and the available housing stock is thus reduced.

In 2010 we will build fewer new houses than at any time since the war, and yet we probably need more. We certainly need new houses to accommodate the working population, to attract new employees into towns and to house the twenty-something-year-olds who are building a successful career.

It is interesting to add that the proposed rise in the cost of university courses will exacerbate the problem. Graduates are likely to accumulate debts of £50,000 after a three year course. Bang goes the deposit they would have otherwise used to buy a house. When ex -students earn £21,000 per year they begin to re-pay the student loan (at 9%), an amount that would otherwise fund £45,000 of borrowing.

Just before the last time the economy collapsed in the late 1980s, the typical age for buying a first house had gone down from 24 to 21 years old. It is currently for unassisted first-time buyers 38! The deposit required for a new first-time buyer's house has increased to almost the equivalent of a first-time buyer's annual salary. No wonder they cannot afford to buy a house until they are in their 30s.

The sting is in the fact that these first-time buyers, irrespective of the age they reach when they sign their mortgage, need to rent until they do! And this will have serious implications for the UK property market, moving towards a continental system of residences.

John Norman, Vice-Chairman

[Editor: perhaps the numerous new flats in town will all be occupied - if the rents are right!]