Rising Demand
Firstly, the population of the UK (unlike many other western countries) is rising. This is partly driven by immigration and higher birth rates. Furthermore, the number of households is rising faster than the population. For example, there is an increase in the number of one person households. This is due to factors such as divorce rates, ageing population and people leaving home earlier. There is also rising demand for second homes and demand from abroad. The demand from foreigners is particularly noticeable in large parts of London.
Restrictions on Supply
Not In My Back Yard - The truth is that most people agree it would be good to build new houses. But, they would just prefer them not to be built anywhere near where they live.
Protect House prices - An obvious motive for opposing homebuilding is that it increases the value of existing home prices. If 10,000 new houses are built in a town, it can only lead to lower prices. If we stop new houses being built, it increases the value of existing houses. Therefore, the majority of the population (homeowners) have a vested interest in preventing new homes being built. Some young, first time buyers, will be keen for new houses to be built, but, they are in a minority and so don't have much influence in the local democratic situation.
What does this Housing Shortage Mean?
Many in the UK, with good reason, would like to see lower house prices so that first time buyers can get on the property ladder. However, if demand rises faster than supply, then in the long run house prices will continue to be much higher than incomes.
Inequality - The current situation has benefited existing homeowners who have seen an increase in their wealth. First time buyers will face tremendous costs to get on the property ladder.
