Peter Felix paints and decorates other people’s homes for a living, but he says it is frustrating that he cannot afford one of his own.
And mortgages are also more expensive. Borrowing rates started to rise in early 2022. An average two-year fixed rate mortgage was then just over 2%; it is currently just under 6%, making monthly payments more than double what they would have been. So there is little incentive for governments to dampen house price rises by making sure more are built, and a massive incentive to support buyers instead, through things like mortgage subsidies and stamp duty cuts – in effect subsidising demand. That has been the policy pattern that has delivered relentless increases in housing costs.
Approvals for units – that is new homes - fell by 13% in the year to April, on top of sharp falls the previous year. Approvals for sites to be built on are running at levels even lower than in the aftermath of the financial crisis.