Concerns about UK housing stock and leasehold system soar

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Concerns about the quality of the UK’s housing stock and the outdated leasehold/freehold system have soared faster than at any point since 2014, according to new research

The YouGov survey, polling more than 2,000 UK adults, is conducted on behalf of HomeOwners Alliance, BLP Insurance and Resi.co.uk architects and has been monitoring housing concerns for six years.

Housing stock quality – or lack of it

The research found the quality of Britain’s homes is the fastest growing issue. Almost two thirds (63%) of UK adults now cite it as a serious concern, up 6% from 2018, while nearly seven in ten people (69%) living in rented accommodation report serious concerns with housing stock quality.

Paula Higgins, chief executive HomeOwners Alliance, said: “It is shocking that in a country that is a leading world economy that so many people have serious concerns about the quality of our old and new housing stock, whether they are renting or are owner-occupiers. We need more decent housing for more of us.” 

Are leaseholds open to corruption?

This year’s survey took an in-depth look at the challenges facing leaseholders. The much-criticised leasehold system has been the fastest rising housing issue over the past five years. Three in five (60%) UK adults now say the leasehold/freehold system – including service charges, ground rent and other fees – is a serious problem. This is up from 42% in 2015. The issue registers similar levels of concern across all regions in England.

More than a quarter (26%) of leaseholders complained about the high cost of works and management fees while just under a quarter objected to unfair service charges (22%) and a lack of control over which major works are done (23%).

Higgins commented: “The HomeOwners Alliance urges the Government to take action now to abolish the leasehold system. Only last week MPs highlighted that fact that developers, freeholders and managing agents treat homeowners as a source of steady profit.”

First-time buyers – or home-owning no hopers?

Meanwhile, the crisis for first-time buyers has reached the largest recorded levels. More than nine in ten (91%) aspiring first-time buyers saying the ability to get on the property ladder is a serious problem, while 88% say house prices and 87% say saving for a deposit are serious problems.

This comes against a backdrop of Government initiatives, such as the abolition of stamp duty for first-time buyers and higher levels of lending for them.

House sale and value nightmares

Two trends indicate a lack of confidence in house prices:

  1. Gazundering has risen as an issuethis is when buyers drop their offer price just before the sale. It has escalated from 40% last year to 45% in 2019.
  2. Anxieties about negative equity have mounted – some 45% of UK adults have described this as a problem.

Regional trends

While levels of happiness among homeowners were highest among the Welsh, who also voted in favour of Brexit, and lowest among the Northern Irish, who voted to remain in the EU.

Two thirds of those in Northern Ireland (69%) say they are really worried about negative equity. Northern Ireland is yet to fully recover from the 2008-9 credit crunch and house price crash, it has had no functioning devolved government since 2017 and is set to be the UK region most badly affected by Brexit because of its border with the Republic of Ireland.

Kim Vernau, chief executive officer, BLP Insurance, commented: “The results of this survey cast another dark shadow over a housing industry rife with systematic faults. The government and the housebuilding industry have come under severe pressure to meet targets and boost housing volumes. This has resulted in a noticeable drop in both the practical design and build quality of new houses, as well as poorly thought through schemes, such Help-to-Buy.

“The government scheme has buoyed the residential sector, keeping prices artificially high, but cracks have started to appear, and its collapse could leave thousands of first time buyers stranded in negative equity.

“In an already stagnating market, where harmful practices like gazundering are commonplace, poor quality of build and the plausible threat of depreciating asset value are compounding pre-existing caution from potential buyers and investors. To restore confidence in a faltering sector, more emphasis needs to be placed on improving quality of build and resisting short-term populist solutions to our deepening housing crisis.”

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