Introduction
The housing market in the UK is faced by numerous challenges. Over the years, the houses have become more and more expensive thus creating a deficit in housing. According to statistics, more young people find it cheaper staying with their parents up to the age of even 35 (Wiles, 2018). House ownership has become harder for the young generation in the UK. Policies and regulations have become harder to develop as the government has let the housing market be controlled by specific bodies.
In the UK, the number of cheaper housing dropped by 11 percent over the last year creating a housing crisis. The housing crisis can be considered to have resulted from the government's housing policies. The state in the UK has disengaged from the housing market in many different ways. First, the government has provided no regulations on house pricing in the United Kingdom. Real estate companies have been developing property that is costly to the citizens. Most of the property developed cannot be afforded by a majority of the population living in the United Kingdom.
The government of the United Kingdom has provided regulations to help in improving the living standards of people around the country. This is one of the many ways in which the government is working on combating the housing crisis in the UK (Wiles, 2018). Currently, the people in the UK consider the government to have failed due to their disengagement in the housing market. Some of how the state in the UK is disengaged in the housing market is as discussed below.
Price Regulation
The UK government is not involved in the pricing of houses in the country. Instead, each state lets independent contractors, and social housing organizations set homes for the people. Houses set up can be highly costly or affordable (O'Sullivan et al., 2003, P.67). However, in the long run, the disengagement by the government in the housing issues in the UK creates a problem since the housing prices continually rise ending up creating a demand for social housing.
Price regulation has become a hard thing for the state to achieve due to the country's ideologies involving capitalism. In the long run, monopolies in the housing markets develop thus rising the prices of houses. Currently, in the UK, people prefer to rent rather than own housing since it has become an almost impossible factor to own a house in England, Wales, Northern Ireland, Republic of Ireland or even Scotland. Each state has been unable to provide regulations within which the real estate companies can operate and build their housing projects for the people.
Development of Affordable Pay to Own Housing Projects
The states in the UK have worked on developing housing projects in which the people will pay to own instead of renting. In these projects, the government's main focus is increasing the access to affordable homes to the people across the United Kingdom. Through this project, the governments are thus not involved in regulating the players in the market but instead involved in the competition. This creates a deficit in the market since the housing built by the government will still not be affordable to most people yet the ones developed by private companies are rent affordable in the long run.
Building Permissions
Provision of building permissions to private developers and support to small real estate companies is another way in which the government has shown disinvolvement in the real estate markets. Across the United Kingdom, the governments have focused on letting the burden of building to private developers since they will be able to increase the developments at no cost on the government. Instead, the government will provide better jobs for the people to be able to afford the new rent rates. The government's focus in solving the housing crisis thus does not involve the building of new homes of controlling the housing markets.
In England, the government set a policy in 2016 to have permissions applied within that three years be ether put in use or disapproved (O'Sullivan et al., 2003, P.77). In this move, the government aims to increase the number of buildings thus reducing the housing gap in the market. In this case, the government can only be seen to provide a regulation to increase the supply of housing in the market to beat the increased deficit. However, in the long run, there are challenges that are still not met in the market due to this type of regulations. For example, the government ends up providing permissions to contractors on building new houses without checking on the competition or cases where the contractors are likely to exploit the housing crisis by over pricing their homes.
In conclusion, the disinvolvement of the government in the housing market over the years has raised eyebrows due to the crisis that they have created. Due to these factors, many people have ended up being unable to afford a descent home and further losing their ability to buy their houses. It is advisable for the government to provide more stringent regulations to real estate companies looking to tap into the market and build homes (Wiles, 2018). The market is large and composed of a large young population that does not have a lot of disposable income to spend. As a consequence, it is necessary to look into factors such as affordability in housing before providing any regulations.
The people in the UK are having a housing crisis due to the increasing cost of living. Local authorities are put to task on factors such as quality housing considering the needs of the local people. The engagement of the government in the housing market in the UK has thus been seen to take effect after many years of suffering by the people (Wiles, 2018). It is essential to understand the necessary conditions to hold before building new homes. The government is also encouraging the private companies to build large volume plats for the people to rent and later own the homes.
Financial and Economic Challenges facing Social Housing Organizations
Financial and economic challenges are some of the factors that face social housing all over the world. In the United Kingdom, the problem is a problem in developing better housing for the people (Pawson, Mullins, & Gilmour, 2010, P.55). However, numerous regulations have created financial challenges for social housing organizations in the country. The economic difficulties can, however, be solved in the long run with proper solutions.
Social housing organizations focus on providing affordable housing solutions to people across the country. The social housing thus provides low rents to struggling households in the United Kingdom. As a consequence, there are numerous challenges that face social housing organizations. The challenges can be categorized as both financial and economic as discussed below;
Rent Affordability
Social housing organizations have to provide the housing rent not higher above inflation. A majority of the tenants will not manage to pay much higher rental rates. It is thus a challenge for the social organizations to keep the rent low enough to make it affordable among the people since higher rent rates are likely to see the increasing cost of living and further low affordability of these houses. In the long run, the demand will end up falling.
Social housing organizations have to keep prices low but still provide good quality services to the tenants. For example, tenants have to have constant water supply and security. However, the rent paid might be enough to handle all the costs involved in running the housing project (Pawson, Mullins, & Gilmour, 2010, P. 80). It is thus a challenge to the developers since it does not provide a clear overview of the factors to be handled when it comes to social housing.
Underfunding of the Housing Projects
Underfunding is one of the crucial factors affecting social housing organizations. The organizations focus on providing affordable housing for all tenants. However, they cannot manage to fulfill such projects without proper funding from the governments or any other charitable organizations (Collinson and Elgot, 2018). In most cases, governments end up providing less than expected funding for the social projects. In the long run, the projects developed end up being either of poor quality or few ending up not meeting the growing market demand.
In the housing market, it is essential to focus on providing housing that is top quality and affordable to the less fortunate individuals in the society. As a consequence, social housing organizations will require proper funding and management to be able to meet their developmental goals (Collinson and Elgot, 2018). Developments in the housing market help a lot of people in society by providing them with an environment in which they can develop their own needs.
High Cost of Land
The rising cost of land due to urbanization has created an increased cost of constructing new buildings (Fitzpatrick, Stephens, & Shelter, 2008, P.100). In the United Kingdom alone, the housing prices have been on the rise due to increasing cost of land. For there to be affordable housing, there has to be a sufficient supply of land to match this increasing demand. In this case, the land has not been sufficient enough for the market. The problem of the rising cost of land can be solved by the government which can subsidize the land costs to create an environment which property developers can build affordable homes for the people.
High Demand for Housing
In most cases, one can see that there is an increasing demand for low-cost housing with low supply. Due to the increasing cost of building, social housing organizations are unable to build houses that can meet market demands (Dorling, 2014, P.90). As a consequence, the problem of lack of affordable housing in the society is constantly increasing. This problem can only be solved if there is sufficient funding and land costs are lowered to reduce the cost of building new homes.
How Social Housing Organizations are Planning to Respond to the Current Policy Changes
Policy changes affect social housing in many ways. Policies put forward can either help in supporting social housing or create more issues with regards to low-cost housing. For example, in the United Kingdom, the government has implemented a policy to promote house ownership. In this project, the government is looking to build more than 200,000 homes affordable to many people in society (Madden, & Marcuse, 2016, P. 112). With this plan, people will be allowed to pay to own the property. However, there are many challenges faced by this type of policy. First, the amount required for individuals to pay to own is too high that it will create a low demand due to the question of affordability.
The houses will no longer be affordable to the people since their prices will be higher and thus, in the long run, the problem will still be in exitance. On the other hand, social organizations can provide housing that is affordable to the people in the long run. In a bid to match the government's objectives, the social housing organizations can give tenants a choice of paying to own or pay for rent in their property (Clark, Gibb, & Clapham, 2012, P.90).
Such a move will see an increasing number of individuals willing to pay to own property in the country. It is important to focus on only one goal which is providing housing to the people. If an individual can pay a lower rent to own, it will be sustainable in the long run and thus eliminate the existing problem (Boughton, 2018, P.111). As a government, improving the living standards of people is important as it helps in developing the economy of the country in the long run.
Social housing organizations are also focusing on building houses that meet the...
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