Property prices are up 1.6 percent since March of last year, despite having fallen by 0.2 percent in the last month.
Buying a typical home on an average salary of £35,000 today would mean that you pay out 40 percent of your take home pay on your mortgage each month.
High interest rates are keeping people’s options more limited when buying property than they otherwise would be. Currently, the Bank of England main interest rate is 5.25 percent.
The current, high interest rate isn’t the only factor making it so expensive to buy a home however. The UK is seriously undersupplied with new housing, and this is a trend that has been going on for a long time.
In 2021/2022, 233,000 new homes were built in the UK, falling far short of the government’s target of 300,000. This was even lower than in previous years. Despite that target, some experts believe the real number of new homes needed per year could be between 421,000 and 529,000 for the 2023-2036 period.
This shortfall in available housing has seen a dizzying increase in property prices. In 1996, the average home cost 3.55 times the average salary. Today, it stands at 10.91 times the average salary.
This has left many millennials renting late into their 30s before managing to get a mortgage. Meanwhile, a third of millennials are likely to be renting for their entire life. With private rents soaring, and social housing stock being sold off, this is likely to leave many millennials and people from gen z destitute as they get older.
In a society as advanced and wealthy as ours, there’s no reason for people to be paying so much for a place to live. It’s well within the government’s power to build hundreds of thousands of homes a year. They managed it after World War One, because they wanted to stave off social unrest and potential revolution, and they can manage it now when we have much more resources.
The truth is that the high cost of housing is a political choice. Housing is treated as a commodity, not a right, and our political parties receive huge donations from property developers. These same companies make huge profits because they’re selling a scarce commodity. Meanwhile, over 13 percent of our MPs are landlords, and also benefit from people being unable to get a mortgage.
Ultimately, to secure a guaranteed supply of housing for everyone who needs it, that doesn’t plunge us into poverty, we need a system that treats housing as a place to live, not an investment or a money making opportunity for developers.
Socialism is the only way to ensure that private interests are kicked out of our housing system for good. It’s the only way that we can have a political system that isn’t corrupted by business.
For now, as we build the movement to achieve that, we should continue to demand that more houses be built, especially social housing, and that rent caps be put in place to help guarantee that nobody is forced into poverty because of their housing situation.
We’re not going to achieve actual democracy for ordinary people, socialism, or affordable housing overnight, but we can do it.
