A few of my suggestions to perhaps make housing more affordable

Over recent years, one of the major stories reported by news channels has been the rise in house prices. In the UK, with the average salary being around £25,000 and the average house price rapidly approaching £200,000, it is incontestable that the majority of the general populace will not be able to buy a property. However, this is not the biggest problem. Indeed, the most pertinent problem is that this problem is not looking like it will be fixed any time soon. House prices in the UK are set to rise 25% over the next five years, according to The Royal Institution of Chartered Surveyors (RICS), with wage growth seemingly not able to match that. This is largely due to a large imbalance between supply and demand, so the logical first step to make housing more affordable has to be to increase the supply of housing.

The supply of housing can be increased, in my opinion, by making construction more productive. This could be done by encouraging private construction companies to get into the market, by perhaps subsidising the cost of construction for them. This would mean that these companies have bigger profit margins, and so are incentivised to get into the housing market, thereby increasing the supply of housing, and, logically, reducing house prices. Although there is a shortage of land to build on, especially in congested areas such as London, more areas of land need to be made available to build housing on, including greenfield sites. Some may argue that we must prevent the urbanisation of all land, however I would argue that people would care about finding an affordable place to live far more than the greenery around them. As such, the “green” community need to make some concessions to allow cities such as London to become more affordable.

The methods which I have suggested will not only be supply-side methods, however. To make housing more affordable, demand orientated methods also need to be employed, for example making the deposits needed larger. Some would argue that the current deposit needed encourages borrowing before the buyer is perhaps ready to buy a house. To combat this, required deposits must be larger, so that the only people who buy housing are the people who can realistically sustain the burden of a mortgage. Although this would indeed mean that less people will be able to buy a property at the present time, it means that only the people who can, will. This will also decrease the demand for housing, for the time being at least, which would also reduce the house prices.

The final method which I shall propagate here is actually not related to housing! This method is to increase the wages of the general populace, so more people can afford housing quicker. This can be done by increasing the productivity of labour, by providing business with more, higher value, capital, so that increased revenue can allow for an increase in wages given. The education levels of the general populace should, also, be increased, so that more workers are equipped with better skills from an early age. When more people have skills, this means that the corporations which they work for will become more productive, which will, again, increase revenue, which increases the scope that these corporations have to provide higher wages.

I must stress that these methods are only only my suggestions, and I do not confirm them to work, if implemented. These are simply my suggestions as to what I think can make housing more affordable, and I do not proclaim them to be perfect, in any way. I also welcome critique in the comments section – that’s always good.

By Shrey Srivastava

A finance and economics enthusiast, and someone who wants to share his views with the world.


  1. You have one thing to blame on rising house prices more than anything else: politics.

    At any current time, only about 10% of people are actively searching for a house or wanting to buy a house at all. In comparison, ownership of homes is at 64%. If you’re David Cameron, who do you want to please more? So the government sits back – purposely restricting any real investment in housebuilding and refusing the weaken planning laws substantially to keep voter satisfaction high. People also hate house building – it ruins countryside, disrupts neighbourhoods and causes a greater strain on local public services. This makes it harder to start building houses as it causes protests, petitions, outcry. It’s a huge flaw of democracy.

    On the demand side, government intervention in the mortgage market is kind of a ludicrous idea just to increase required deposits (that definitely WON’T be popular either). Also, what that would do is only worsen the issue of home ownership. It might weaken demand for housing in the short term, but, it would cause landlords to buy up more housing only speeding up the growth in private renting in this country which costs the government in housing benefit and is a short term fix for house prices that don’t help anyone whatsoever – except wealthy landlords.

    Productivity and skills you obviously can’t argue with but, they’re very long term solutions to a short term issue. You can invest in better education or industry right now but the improvements to productivity and wages (productivity also doesn’t necessarily raise wages either) will take years to come through – which won’t stop house price inflation or increase home ownership which we need to do right now.

    The solution is obviously to increase supply – whether that’ll actually happen is questionable and to increase interest rates (which will have a similar effect as increasing minimum deposits) – but that could have other massive implications outside the housing market. So house prices will never stop inflating – until they crash and bring the whole economy down with them.

    I’m really enjoying reading this blog though, keep going Shrey!

    Liked by 1 person

  2. Thank you very much for this lengthy comment! I agree with the point you have made regarding politics, and the supply solution, however I must ask, do you not agree that the landlords will perhaps be dissuaded from buying by higher prices also? In addition, I feel that it is more important to do the right thing than what is popular. Sometimes my idealism depresses me – I’m going to be more realistic about things as an adult such as yourself 🙂


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