MANCHESTER, England (CN) — British house prices hit a record high in April as the government pledges to build 1.5 million homes and take other steps to tackle the country’s deepening housing crisis.
The average asking price for newly listed properties rose to $497,770 this month, a monthly increase of $7,000, according to property website Rightmove. An average house price in the U.S. was $398,400 in February, the National Association of Realtors said.
Housing Minister Matthew Pennycook is promising to ease planning regulations and bind local authorities to development targets to get more houses built quickly, especially in the least affordable areas.
Despite such pledges, including a recent announcement to inject $2.6 billion more into constructing 18,000 new social and affordable homes, the Office for Budget Responsibility projects the government will fall about 200,000 units short of its 1.5 million house target.
Nick Gallent, a professor of housing and planning at the University of College London, said that since the 1980s, when the government restricted local authorities' power to build homes, the country has largely relied on the private sector.
“Private enterprise builds for profit, only building the homes that it estimates will sell at a price acceptable to investors,” Gallent said. “The target will not be met because the self-interest of private builders is to not deliver to that level.”
Gallent doubts that housing associations could make up the difference, at least not in the next five years.
The housing crisis
The average home now costs eight times the average worker's yearly earnings. By comparison, the average U.S. house cost 5.6 times more than the typical salary in 2022.
More British adults are living with their parents longer. The average first-time buyer in 2024 was 33, two years older than a decade ago.
Ada, 36, lived in an affluent area of London, renting with her husband, but wanted to save for a house.
“We chose to live on one wage and save the other,” Ada said, adding that the couple worked six days a week. They cut out daily treats and takeaway, even taking a course to help them avoid unnecessary spending.
They initially wanted to stay in the capital but knew they had to move.
The capital is home to some of the least affordable areas in the country. An average house in London costs $922,200 — just under twice the national average.
“We couldn’t afford London prices. It was either a flat in London or a house with a garden outside the capital,” Ada said. After three years of saving and looking at 60 houses, they eventually bought their own home and now commute to the capital.
Rob, who lives in Yorkshire and is in his late 30s, knew that owning a home was out of reach when he was renting in his 20s. At the time, he focused on working and travelling. When he returned to the U.K. in his early 30s, he moved into his mother’s spare room.
“It was the only way I could have afforded a deposit,” Rob said. Saving while renting simply wasn’t possible.
“It was a difficult moment in my life being in that situation at my age. Friends had moved on and things were different. I worked most weekends and often away from home,” he said.
After two years of saving, he finally had enough for a deposit.
Crackdown on non-resident buyers
As house prices climb and housing stock tightens, there is increased scrutiny about who owns Britain's homes.
In recent years, several Western nations have tried to improve affordability by taking aim at foreign ownership. Canada introduced a two-year ban on non-resident buyers in 2023, later extending it until 2027. New Zealand and Australia have imposed similar restrictions. Denmark requires foreigners to reside in the country for at least five years before they can buy property.
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