There is a widespread belief that a housing shortage exists in the UK. Although all regions are expected to see growth in household numbers, the greatest pressure will continue to be felt in Southern England (i.e. London, the South East, South West, and Eastern regions.) For example, the population of the South East region alone is expected to increase by 50,000 a year – about 1 million extra homes in the next twenty years or so. While 70% of population growth is in London and the south of England only about 50% of house building takes place there. The housing industry has in recent years been under severe pressure to meet the increasing population. For this reason the UK is presently suffering from a high housing shortage, which is likely to rise over the next 15 years, due to the high volumes of migrant workers from the EU and the increase in population. The total number of people living in the UK grows whenever there are more inward migrants than people leaving the country. International inward migration is a significant contributor to population growth. Recently the Government Actuary’s Department increased its figures for net inward migration to the United Kingdom from 95,000 to 135,000 people per year for the period to 2021. It is therefore necessary for the construction industry to dramatically increase production in house building in order to reduce the effect this shortage will have on the UK such as consequent impacts on house prices, conditions, overcrowding and homelessness.
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Despite the strong economy, housing production by both private developers and social housing providers has been falling. According to the Joseph Rowntree Foundation, the number of homes built during each of the past five years has remained static at 154,000. It is for this reason that house prices continue to soar. It is clear that the construction industry must build faster and more efficiently to meet the increasing needs of the UK housing market. The UK construction industry has been known for its lengths and costs in completing construction projects therefore leading to slower completion of developments. This is a wide spread problem that needs to be addressed for the housing demands to be met.
Household projections, based on 1998 figures from the Government Actuary’s Department and past trends in household formation, suggest that between 1996 and 2021, England will need to accommodate an extra 4.3 million households. Estimates suggest that the backlog in 1996 was approximately 650,000 households. It seems likely that the figure has increased over the last five years because supply has not matched demand.
There are difficulties within the UK construction industry to which attention has been drawn by the Latham and Egan reports.
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