London’s housing crisis growing deeper
Housing crisis in London is growing deeper for middle-class people as demand for affordable houses is outshining supply, pushing prices up.
Pocket Living Limited, which uses interest-free funds from the city for constructing homes and selling them for nearly 20 per cent below market rates, said that the people who are neither rich nor poor are suffering the worst brunt of the housing crisis.
Andrew Heywood, who has researched housing market for the Smith Institute that aims to promote a fairer society, said, "The very fact that people above the median household income in London require subsidized housing is a strong indication of market failure. The housing market is fundamentally dysfunctional."
As per broker Knight Frank LLP, central London is the second-most pricey place in Europe to buy a home after Monaco; and soaring prices are making the situation even worse. Four out of every five people in London (80 per cent) think that there is a housing crisis in the city.
Home prices in London jumped nearly 18 per cent in the twelve months through February this year to an average of 458,000 pounds. It was the biggest rise in home prices since July 2007.
Households with annual earnings of less than 50,000 pounds account for nearly 57 per cent of total demand for homes, while the city is facing a shortfall of 21,500 homes per year for the next five years.
Even London Mayor Boris Johnson has admitted that shortage of properties is the capital city's biggest problem. He has set a target to build 42,000 homes per year, of which 17,000 would be sold or rented at discounted rates.