Housing won’t normalise until 2020
Speaking at the Policy Forum for London Keynote Seminar, she felt the UK market – and London in particular – has little chance of returning to normal in the near future which will result in more people moving into the private rental sector.
Whitehead said: “We are not going to be back to normal until the end of the decade.
“Maybe I will stand here in five years’ time saying we are not going to be back to normal until even later.”
She explained: “The number of transactions is still very low because of lack of mortgage funding, so we’ve ended up with a lot more private renting and less housing, if we felt that 2006 was not significantly out of line with what we can produce.”
Whitehead pinpointed the 2007 economic crisis and the lack of house building long-term as the reasons for the housing crisis.
She said: “The 2007 crisis has knocked the system really, really badly; the closure of mortgage and investment funding markets meant that London output fell faster than anywhere else.
“The longer-term problem has been there for many decades. Every cycle we produce less new housing.
“Every time there’s volatility in the system supply stops responding and it take as time to build up.
“In 2009 we were all told off for saying it won’t be back to normal until at least the middle of the decade.”
Shelter head of policy Toby Lloyd , who was also speaking at the seminar, reckons the London rental market is now in an unhealthy place due to rocketing demand.
He said: “Don’t let anybody tell you that London rents are in a healthy state because they really are not – I see people every day whose rents are rocketing.
“We need a more proactive strategy for private renting because that is where more of us are going to be.
“We will not build our way out of affordability any time soon.”
He suggested: “We have to get to a world where land is much cheaper that is going into the system.
“What I would want to see is more done with public land.
“Selling to the private sector is digging us into a hole.”