Demand for housing in the UK is currently outstripping supply, which may reduce the UK's economic ...
Demand for housing in the UK is currently outstripping supply, which may reduce the UK's economic competitiveness, the Council of Mortgage Lenders (CML) has reported.
Despite the weakening of house price growth in recent years, the CML argues the supply of homes has been mainly static or falling.
Backing this up, the House Builders Federation recently estimated the number of households was growing at 220,000 annually, meaning the undersupply of homes is worsening by at least 50,000 a year.
Despite the current strength of demand, the National House-Building Council released figures last month showing the number of applications to build homes in the second quarter of this year was 5% lower than in the same period last year.
While constraining the economic competitiveness of the UK, the CML said another consequence of an inadequate supply of homes is that it reduces the mobility and flexibility of the workforce.
As a consequence of the strength of demand, prices have continued to rise which has meant mortgage lending rose strongly again in July, with gross advances reaching a record £25bn, 12% higher than in June this year and 18% more than in July last year.
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