The London Property Crisis Debate Continues

28 December 2011 Categories: News

The London Property Crisis Debate Continues

London, along with the rest of the UK, is in the midst of a property crisis, there is no denying this fact. Fewer people today can afford the deposits needed to purchase a property and as a result the demand for private rental property far outweighs the supply. To make matters worse, many authorities are reducing the amount of LHA available to tenants from the start of 2012; a move that means fewer landlords will accept LHA tenants and the homeless problem will continue to worsen.

So what is the answer?

According to the ‘New Local Government Network think tank’ several authorities in London need to consider building new council houses. The think tank says that building 9500 new houses throughout several Boroughs will save taxpayers over £56million in the long run – when compared to the cost of housing homeless and struggling families in private rental properties.

London landlords on the other hand argue that there are already enough investment properties available but because of the state of the buy to let mortgage market they are unable to purchase them with the deposits they have. If mortgage lenders would consider lending 80-90% LTV they could provide more affordable accommodation for council-placed tenants.

Regardless of which answer is the best option something obviously needs to be done, especially when the think tank’s prediction that the shortfall of London houses will reach 750,000 by 2025 is also taken into consideration.