What Is The Position Of The Home Owners Alliance Regarding New Home Building?

By Author: Bradley Weiss
Total Articles: 272
Comment this article

As many as five million residents of the UK wish to own their homes but don’t. Private sector investors are critical to alleviating the problem.



The name of the UK Home Owners Alliance (HOA) pretty much summarises its mission: this is an organisation that advocates for increased homeownership. Naturally, that includes encouraging strategic land developers to contribute to the nation’s housing stock on a simple economic principle: supply must meet demand if prices are to make home ownership accessible for the citizens of the UK.



It’s an association that has taken a strong position with research to back up what it says. And the collection of data as it corresponds with public policy and trends in UK land investment is hard to argue against:



• 86% of adults in the UK want to own the roof over their heads.



• Ownership rates peaked in 2002 at 69.7%, but are now below 65% and by some predictions ...
... will drop below 60% in coming years.



• The “homeownership gap,” the portion of the population that wishes to own but doesn’t, is now 5 million people.



• The average age for first-time purchasers is now 33 and is rising each year.



• This long-term decline places UK homeownership rates within the Eurozone below those of Portugal, Ireland and Bulgaria.



While the fingers of blame point in many directions - Thatcherism and the selling of social homes without rebuilding, the 2008 financial crisis and subsequent stringent lending, the London-centric nature of employment and business in the UK, foreign wealth that is buying up English residential property and distorting the market - the HOA also emphasises some of the less-quantifiable effects. “Many young people are having their dreams, and self-esteem, shattered,” said HOA in a 2012 report (“Death of a Dream”). “Research shows that people are happier owning their own home, rather than renting. Many adults are being forced to live with their parents even though they don’t want to - putting severe stress on family relationships. More limited homeownership makes us a more unequal society. With fewer people building up equity in their homes, fewer will have a big enough financial cushion for old age, putting strain on welfare systems.”



Land developers who work strategically with local councils are on the front lines of alleviating the shortage of homes. These are the private interests driving development, where real asset portfolio investing results in the transformation of under-used land in locales where employers need workers, ideally within close proximity of their workplaces. Of note, there is a noticeable exodus from London to other cities by both younger workers and employers who find land, homes and commercial property more price-competitive and where the quality of life is arguably better.



What do investors in real asset portfolios get from their involvement? The primary driver is individual asset growth, of course. Land and property are historically some one of the greatest engines of wealth development. The characteristics of strategic land include a relatively short timeline for achieving that growth and exiting (if the investor choses) the investment. This is made possible by working with asset portfolio specialists who identify land that is likely to achieve planning authority status changes. With that accomplished, the land is designed and developed with infrastructure (roads, utilities, etc.) to accommodate homebuilders, who then purchase lots and build to suit homebuyers.



Any investment decision involves some risk, of course. The investor should always contact an independent financial advisor to determine the smartest course of action.