NEWS out today shows that the UK property values are set to increase by 21.6 per cent on average by the end of 2028, up from previous estimates. The average price of a house is now set to increase by £61,500 from £285,000 last year to £346,500 by 2028.

While some homeowners might cheer the surge in the value of their homes and the projected turnaround in the market, those hoping to get onto the property housing ladder will, once again, be cursing the fact that the goalposts for home ownership seem to keep shifting further and further away.

The problem is a simple one: We have failed to build more houses. And a report out yesterday showed exactly that.

Savills has forecast that the number of new home completions in England will fall from an annual average of about 210,000 homes over the past five years to about 160,000 over the coming year.

Savills obviously noted the downturn in the market with the fall in demand for homes, as buyers grapple with high mortgage rates, as well as the impacts of higher debt costs and the inflation in building costs hurting housebuilders.

But it also highlighted the uncertainty in our onerous planning system.

The ramifications of this cumbersome planning system go well beyond failing to deliver enough homes to house Brits - it risks holding back the economy.

It can lead to a misallocation of resources as unaffordable housing in cities makes it harder for people with the right skills to move there, shrinking the pool of workers available to firms. It has also held back investment in national infrastructure, which hurts productivity and economic growth.

Some have even gone as far to suggest the housing crisis is putting people off from having children altogether, impacting the country's overall birth rate.

With polling suggesting that housing is one of the top areas of concern among voters, particularly younger ones, there is no doubt that the topic is set to be a central issue in the upcoming general election.

While both the Conservatives and the Labour Party have committed to building 300,000 homes a year, voters should be casting a close eye on these policy pledges to make sure they get to the heart of solving Britain's housing crisis.

Building more houses is not only important for housing the next generation, it is crucial to getting our sluggish economy growing again.

(c) 2024 City A.M., source Newspaper