Civil Engineering Reference
In-Depth Information
4 The
registered social landlord sector
- property managed by non-profit making
organisations that combine public and private funds to provide housing
for those in need. A large proportion of this sector is made up of properties
managed by housing associations.
These four sectors have been listed in order of size according to the format used
to officially measure tenure in the UK. In general terms, however, it is sufficient to
understand that housing demand may be either for owner occupation or rent, or for
some combination via shared equity. We now consider the main factors determining
demand for housing within three main markets.
DEMAND FOR OWNER-OCCUPIED HOUSING
Most households in the UK, Ireland, Scandinavia, Australasia and much of Europe
demand homes to own and occupy. Some 65 per cent of the households in the UK
live in this form of tenure, and the relative size of the owner-occupied sector in
Spain (80 per cent), Ireland (76 per cent) and Finland (78 per cent) is even larger.
This form of ownership is generally supported by government initiatives that
encourage demand by making the process of home buying as fast, transparent and
as consumer friendly as possible. In the UK there have even been tax incentives
for owner occupation, in the form of a subsidy on mortgage repayments offered
regardless of income, though these have now been phased out. The logic is that if
people own the property that they occupy, they will maintain it better. The feel-good
factor derived from ownership makes the transaction costs of choosing and funding
worthwhile, especially as a house provides an investment as well as a shelter. As you
can imagine there are several factors that determine the demand for privately owned
housing, and in
Table 4.1
we identify the main ones.
Table 4.1
Factors affecting demand for owner-occupied housing
The current price of housing
The price of other forms of housing
Income and expectations of change
Cost of borrowing money and expectations of change
Government incentives such as tax benefits
Demographic factors such as the number of households
Price of associated goods and services, such as maintenance, furniture,
council tax, insurance, etc.
DEMAND FOR PRIVATELY RENTED HOUSING
Since the Second World War there has only been a small market demand in the
UK for privately rented accommodation. At present approximately 16 per cent of
UK households demand this type of accommodation. This is in direct contrast to
some European economies where as many as 40 per cent of households are living
