Guest Blog: Looking Ahead to the 2022 Housing Market

By Guy Horne, CEO and co-founder of HSPG

This has been a tumultuous year for the economy as all sectors have grappled with the effects of the Covid-19 pandemic. The resilience of the housing market, though, over the past 12 months has surprised many analysts. But with the nascent recovery threatened by the Omicron variant, families still facing economic uncertainty and interest rates on the rise, the outlook for the broad housing sector is less clear. However, what is in no doubt is the need for a step-change in the supply of Affordable Housing.

Affordable Housing should be prioritised

Over the past 12 months there has been an exponential growth in house prices and though the prospect of interest rates rises may temper these growth rates there are, as yet no real signs of any significant slowdown in house price growth. House prices continued to jump a further 10% in the year to November 2021, meaning house prices are now, on average, 15% higher than when the pandemic hit.

These price rises are continuing to make more housing unaffordable to an increasing number of families, many of whom are facing financial difficulties. A good likely illustration of this is the rising levels of rough sleeping – they are now a shocking 141% higher than in 2010.

This combination of rising prices and financial insecurity has intensified the demand for Affordable Housing. Research by the Centre of Social Justice (CSJ) found that more than half of the population believe local housing costs are too high and the majority of respondents believed the primary goal of housing policy should be affordability. With less than one in six UK adults believing the housing crisis will be solved in their lifetimes, meeting this growing demand for Affordable Housing should be at the forefront of housing policy in 2022.

Look north

While the need for more Affordable Housing is clear, there is also a requirement for such housing to be more equitably located, particularly in the North of England. Currently, London accounts for 22.7% of all Affordable Housing delivered in the last 30 years. Meanwhile, many areas in the North of England have been neglected. For example, the Yorkshire and Humber region accounts for only 10% of total Affordable Housing delivered. In the North East, figures are even more stark with the region accounting for just 3.7% of such housing.

At HSPG, founded and headquartered in Manchester, we are committed to supporting much needed Affordable Housing projects in the North. Our partnerships with local authorities, such as with Manchester City Council, enable the swift delivery of cost-efficient homes while also helping authorities meet their obligations to provide housing for those who need it under the Homelessness Reduction Act 2017.

We are very supportive of the delivery of Affordable Housing in the North and want to help the Government deliver its levelling up agenda. With Michael Gove hinting at that the Government’s housing policy will include a greater emphasis on building in the North of England in 2022, this year could be transformative for the Affordable Housing sector in the region.

Future is green

Building more Affordable Housing is a key priority for 2022 – but such housing and housing in general needs to be built in a sustainable manner. With the recent COP26 conference still at the forefront of everyone’s minds, the pressing need for all industries to play their part in the race to net zero is becoming increasingly clear. In the EU, residential and commercial building stock accounts for a significant 36% of all greenhouse gas emissions. Clearly, the housing industry has an instrumental role to play in our efforts to reach net zero. An increased focus on sustainable construction needs to be a key trend in 2022 in order to help achieve these environmental goals.

For example, the conversion of unused retail space into residential buildings can offer a solution to both the environmental and housing crisis. By retrofitting empty retail space into homes, it is estimated that up to 450,000 desperately needed homes could be provided. At the same time, this method offers key sustainability benefits by reducing the environmental impact of construction.

At HSPG, we have already seen first-hand the benefits that these projects can offer. For example, one of our projects was the conversion of an old William Hill branch into homes for people who have experienced domestic violence. These projects can offer homes for the most vulnerable members of society while also delivering environmental benefits.

In 2022, the housing sector should deliver more projects that help not only hard-working families but also those who are among the most disadvantaged in our society, all done in a sustainable manner, to help ensure a net zero future for us all.-RESI-BROCHURE-5C.pdf