Where Are the Most Affordable Homes in the UK?

Summary

Podcast Summary: In the City (Bloomberg)

Episode: Where Are the Most Affordable Homes in the UK?
Date: February 20, 2025
Host: David Merritt
Guest: Stuart Hare, Chief Executive of Skipton Group

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Episode Overview

This episode dives deep into the state of the UK housing market in early 2025, with a particular focus on housing affordability, regional disparities, and the policy landscape under the new Labour government. David Merritt interviews Stuart Hare from Skipton Group for an insider’s perspective on the challenges facing first-time buyers, the implications of changes to stamp duty, and the broader economic context.

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Key Discussion Points & Insights

1. The State of the UK Housing Market ([01:47]–[06:06])

• Market Still Resilient: Despite broader economic gloom, the UK housing market remains strong, with house prices up 3% year-on-year and transactions rising over 20%, as buyers adjust to higher interest rates which are now gradually easing.
  • “People are getting used to the slightly higher interest rate environment and indeed those interest rates are starting to come down.” – Stuart Hare [04:52]
• Supply Problem Persists: While demand is picking up, the number of new homes being built is not increasing, keeping supply constrained and nudging up prices.
• First-Time Buyers Locked Out: Over 90% of prospective first-time buyers are priced out unless they can access substantial financial support, highlighting a “structural problem” for the market’s long-term sustainability.

2. Stamp Duty Shake-up & Its Consequences ([06:06]–[09:56])

• Reversal of Relief: Temporary stamp duty relief for first-time buyers (up to £425,000) is set to expire, with the threshold rolling back and affecting a much larger proportion of buyers: from just under 10% to 30%.
  • “Three times as many households are going to be impacted… the extra cost is going to be £6,000 more expensive.” – Stuart Hare [07:18]
• Deadline Rush: A rush is underway to complete purchases before the April 1st rollback, creating a “huge logjam of transactions.”
• Economic Implications: Hare argues that restoring the tax will suppress economic activity; the ripple effect of a home purchase (furnishing, renovations, services) stimulates local economies.
  • “You actually create economic activity around the actual purchase itself, which then leads to greater economic activity more broadly, which then makes up any tax shortfall.” – Stuart Hare [09:56]

3. Broader Economic Perspective & Growth Concerns ([10:29]–[12:45])

• Stagnant Growth: UK GDP growth is stagnant (~0.1%). Hare emphasises that short-term fiscal decisions must be balanced by long-term visions—otherwise, the UK risks “stagflation” and ongoing low growth.
• Need for Planning Certainty: Stability in planning, house-building policies, and a willingness to make tough, long-term investments are needed to foster economic growth and confidence in the housing sector.

4. The Planning System and Housing Supply ([12:45]–[15:27])

• Chronic Underbuilding: The UK faces a shortage of 1.5–2 million homes, impacting both owner-occupied and social housing.
• Mission-Based Approach: Hare stresses the need for government-wide, mission-based agendas that bring together planning, environment, and local authorities to coordinate large-scale building efforts.
  • “You need stable government… and you need this as a concerted effort.” – Stuart Hare [13:28]
• Political Will & NIMBYism: Overcoming local resistance to development (NIMBYism) is necessary even though it may be unpopular in the short term.

5. Regional Disparities in Affordability ([15:27]–[20:08])

• North-South Divide: New towns in the south are only part of the answer. More balanced development is needed to spread economic activity and housing opportunities nationwide.
  • “Levelling up isn’t about levelling down London…it’s about creating new wealth into the outlying areas as well.” – Stuart Hare [15:58]
• Skipton’s Affordability Index:
  • Most Affordable: Scotland (notably Aberdeenshire) stands out, with lower house prices paired with reasonable incomes.
  • Least Affordable: Not London or the Southeast, but places like Ceredigion in Wales, where very low incomes push even modest property out of reach.
  • Cities: Manchester’s centre has improved as more affordable homes and higher incomes have spurred urban renewal.
• London’s Exceptionalism: Higher incomes mean London isn’t the least affordable overall—but rental affordability, especially for key workers, remains a major challenge.
  • “London is, as always, unusual… There are pockets in London where you can get affordability.” – Stuart Hare [20:08]
  • “We need houses for those key workers as well. If not, there’s no point in us staying there.” – Stuart Hare [20:56]

6. The Outlook for Interest Rates ([23:22]–[26:26])

• Current Stance: At 4.5%, rates are “restrictive”—constraining borrowing and dampening growth to tame inflation.
• Forecast: Hare anticipates 2–3 more rate cuts in 2025, finishing the year with rates around 3%.
  • “Absent any major shocks, I think you’re looking at longer term interest rates, two and a half, three percent.” – Stuart Hare [24:56]
• Impact on Housing: Even with falling rates, fundamental supply shortages mean prices will remain high unless housebuilding increases significantly.

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Notable Quotes & Memorable Moments

• “Over 90% of the people who are in the market to buy their first house and not be reliant on tenants or parents, they’re priced out of the market.”
  — Stuart Hare [05:26]
• “It seems ludicrous to us from a macroeconomic perspective to have this transaction tax penalize so many first time buyers.”
  — Stuart Hare [08:23]
• “If we’re too short termist… we are going to be a very low growth zone for quite a long time, if not even a stagflation zone.”
  — Stuart Hare [10:48]
• “You need central and local government working to quotas, working in collaboration to actually unlock the housing opportunities that do exist across the UK.”
  — Stuart Hare [14:27]
• “The reason we’re so passionate about housing… it’s a fundamental, for a little bit, the psychology of the UK, your own house… but also the economic activity within the UK.”
  — Stuart Hare [27:12]

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Important Timestamps

• [01:47] – Opening remarks on the UK’s economic outlook and housing market resilience
• [04:52] – Stuart Hare on transaction trends and first-time buyers’ structural challenges
• [07:18] – Breakdown of stamp duty changes and their effects
• [09:56] – The multiplicative impact of house purchases on economic activity
• [10:48] – The risk of stagnation and the need for long-term planning
• [13:28] – The necessity of stable, coordinated government action on housebuilding
• [15:58] – Why “levelling up” isn’t just about London
• [17:23] – Explanation of Skipton’s affordability index and regional insights
• [20:08] – London’s unique affordability dynamics and challenges for renters
• [24:00] – The outlook for interest rates and implications for the market
• [26:26] – Supply and demand fundamentals keeping prices high

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Takeaways for Listeners

• The UK housing market is robust, with strong demand partly driven by expectations of lower interest rates, but the imbalance with supply keeps prices elevated.
• The rollback of first-time buyer stamp duty relief is poised to impact tens of thousands, making homeownership even tougher for new entrants.
• Long-term solutions require political will, reforms to planning, and buy-in from both central and local governments.
• Regional affordability varies dramatically, with Scotland relatively accessible and some Welsh regions surprisingly unaffordable due to low incomes.
• Interest rates will likely fall, offering some relief, but without more housebuilding, affordability will not significantly improve.

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This summary captures the essence and detailed substance of the episode, highlighting the core challenges, key policy debates, and regional realities shaping the future of UK housing.

Transcript

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Bloomberg Audio Studios podcasts radio news here in the UK.

[David Merritt]

The economic news, both from consumers and businesses, could be described as feeling a little bit glum. If the Labour government had a honeymoon period, it ended fairly quickly. But there's one British industry that really does continue to soldier on, and that is our seemingly stainless steel housing market. In January, house prices were up 3% on the year. Despite tales of woe from business and the broader economy, can that trend actually last this week we look at what's in store for house prices in 2025 and how recent government policies are factoring into what looks like a possible bumpy ride for the market.

[Stuart Hare]

Welcome to the City of London. The City of the City.

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[Stuart Hare]

The next station is Bank. Please mind the gap between the train and the platform.

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The financial heart of the country.

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The City.

[Stuart Hare]

The City.

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Welcome to in the City.

[Stuart Hare]

Stand clear of the doors please.

[David Merritt]

This is in the City, the Bloomberg podcast that brings you the stories shaping the world's financial capitals. I'm David Merritt and this week Stuart Hare, Skipton Group Chief Executive, joins Me. Stuart, welcome back to in the City.

[Stuart Hare]

Thanks, Steve. Great to be back.

[David Merritt]

So, yes, I think you were last on last summer. It was just before the election and we can come to that and the outcomes from that. But just before we start, just can you remind us everything that the Skipton Group includes and why you're such a big player in the UK housing market?

[Stuart Hare]

Sure. So, first of all, as the name might suggest, our centerpiece, our ownership structure is we're a mutual and Skipton Building Society is that which owns all the other businesses that I'm going to talk about. But we're also by far the largest estate agent and property services company in the UK, over 10% of the estate agency market, which gives us an insight on what's happening day to day, hour to hour, as people buy, sell and let their houses. We also have an AI company out New Zealand database and AI company out in New Zealand, which is everyone always asks why. I ask myself at times why. But it's a really great asset for us to then build solutions. And we've got an international bank based in the Channel Islands, so a sort of good varied mix of businesses.

[David Merritt]

So you really do have a ringside seat for the UK housing market, which is such an important part of the economy and an obsession, of course, with the majority of the population. When you came on last summer, there was speculation about what the new Labour government, when they come in, would do. Since then, we've got a much clearer idea. We had a real landmark budget from the Chancellor. Rachel Reeves surprised a lot of people in terms of the amount of borrowing and the amount of spending in there. We had some turbulence in the UK bond market and then we've had the bank of England cutting rates. So a lot has changed. A huge amount has changed from last summer to where we are now, near the start of 2025. Give us your reading of the state of the UK housing market.

[Stuart Hare]

If I look at the market overall, the housing transactions are up materially year on year, over 20%. So people are getting used to the slightly higher interest rate environment and indeed those interest rates are starting to come down, which is encouraging people to buy and sell. And it's really across the housing spread. So not just first time buyers, but we're seeing people move as well, so transaction volumes are up. That said, you'll notice from builders that the number of houses being built isn't necessarily increasing. And so the supply side, the demand side, is picking up, but the supply side isn't there, which is. Therefore you're seeing marginal increases in house prices. So that's the sort of macro of the market. However, the market has structurally got a huge problem and that's really about first time buyers. We recently issued a report on affordability. We do it every six months and it points to the real challenge. Over 90% of the people who are in the market to buy their first house and not be reliant on tenants or parents, they're priced out of the market. Given the scale and the size of the savings, the deposits and the affordability of any mortgage they would need to take on. And that's not really sustainable for a housing market into the medium to long term.

[David Merritt]

This first time buyers problem, part of it's to do with the pricings that are just out of reach of lots of people. And you've got your affordability report which shows the bits of the country where that's the case. But you also highlight the stamp duty issue. So the government is rolling back the threshold at which you have to pay stamp duty. That's the tax to purchase your home. There's a higher threshold of that generally for first time buyers. The previous Conservative government had increased that threshold and then announced it temporarily a couple of years ago to try to give some support to the housing market. And then they said that would be rolled back that support and the current government, just to be clear, this is not a decision that Mitchell Reeves made. But the current government haven't changed that, have they? So they are still implementing that from the 1st of April and your report says that is really going to damage the market. And in fact we had a story out this week about a huge logjam of transactions, particularly in London. This is from Rightmove saying that people are rushing to buy those first time houses and to get ahead of that 1st of April deadline. Because we're talking about thousands of extra pounds in cost, aren't we, for first time buyers who are already stretched. Can you talk a little bit about the significance of that?

[Stuart Hare]

Yeah, let me break down those points a little bit. First of all, the temporary stamp duty relief was allowing 0 stamp duty up to £425,000. So if your first time buyer house was up to £425,000, you didn't have to pay stamp duty by that reverting back to the previous level. That means that when you look across the uk, you move from local, local authority level about just shy of 10% of properties being affected by the stamp duty threshold, that moves to 30%. So suddenly three times as many households are going to be impacted and have to pay stamp duty. And that stamp duty, at its maximum, the extra cost is going to be £6,000 more expensive. And so this is going to put people off. So what's happening is more and more people are trying to get their transaction done and transaction done means they actually have moved in. The stamp duty happens at the point where the money is exchanged. It's not at the point where you agree the house you're wanting to buy. And we know there's a delay in a backlog when you're dealing with conveyancing of a property, et cetera. So really, people who haven't yet agreed to buy a house, they're unlikely to get it cleared before April. It seems ludicrous to us from a macroeconomic perspective to have this transaction tax penalize so many first time buyers.

[David Merritt]

In the budget that Rachel Reeves announced in the autumn, there was a measure, wasn't there, about upping stamp duty for second homes. So that's going off to the wealthier part of the market. Right. So you can understand why she should have done that. And of course she makes the case that government finances were in a mess, that they inherited and they had to fix the foundations, as she's repeatedly said. But this particular measure, as I said, was a previous plan for the Conservative government. So do you think there is a window for her to listen to your appeals here and maybe roll things back?

[Stuart Hare]

So I really hope so. What we saw last week, for example, was the Economic Secretary to the treasury starting to talk about loosening the regulatory rules to help more people into their first time houses and help people onto the housing ladder. We heard from Matthew Pennicuk, the Housing Minister, with similar things, not just about building more houses, but also helping people to buy them. So we think there's a little wave of interest in this. But the single biggest thing that the treasury could do in the short term is just maintain this. And I don't think we're talking about short term that much more tax receipts, but we are looking at, if you remember buying your first house, if you've been lucky enough to do it. Dave, I shouldn't jump to any assumptions.

[David Merritt]

Back in the midst of time. Yeah, exactly.

[Stuart Hare]

You're automatically going to get tradesmen through or tradespeople through, you're going to be putting pictures up, you're going to be buying things. For me, it was buying all over Ikea and Croydon. So the reality is you actually create economic activity around the actual purchase itself, which then leads to greater economic activity more broadly, which then makes up any tax Shortfall that would be due to the stamp duty change. So I think if you're more long sighted, then ultimately any transaction tax is probably going to hold you back in terms of economic growth.

[David Merritt]

And certainly, of course, we've all seen the headlines around worries about growth. We saw the latest GDP numbers eking out, what was it, 0.1%. And we're basically stagnating in the British economy at the moment. Just stepping back a bit for the UK economy. Are you more optimistic or less optimistic when you look through the rest of this year?

[Stuart Hare]

I think it's a difficult one to call, but I think there are some things that we definitively as a country need and we need longer term planning. So if we're too short termist, if we're too much trying to save money or generate taxation for now and don't have structural plans into the future, then we are going to be a very low growth zone for quite a long time, if not even a stagflation zone. So what we have to do is we have to think a little bit beyond the next quarter or the next budgetary cycle and start to think about what's going to pick up economic activity into the long term. Now here the Labour government have talked about some big missions and sectoral areas they want to go after. We need to see the plans, we need to see those plans coming to fruition. I think when you start, if and when we start to see them, then investment can start to go into the economy and we can start to see growth. And if you think about that in a housing context, giving confidence to builders to put spades in the ground because they know the planning permissions and all the other rules aren't going to get in the way so that their houses will be built in two to three years because there'll be buyers to then buy them, et cetera. Enough social housing in the system, even the part of building starts to generate economic activity, then when they're purchased and communities are created, there's more economic activity. So my advice or guidance to the government would be start to think a little bit longer term. Now that does challenge them because they've got short term books to try to manage. We're sitting here acutely aware of the geopolitical tensions, putting pressure on defence spending. The there are some difficult decisions, but we do need to take those difficult decisions or just accept our reality, which is that we're a low growth zone, which means that we wouldn't be able to afford the services that we all think we need. And deserve and therefore it's always going to be political instability or bouncing between different factions. So I think we've got to start really thinking longer term housing and house building and in fact building more generally is a big part of that.

[David Merritt]

You mentioned planning and I think they've talked about this a lot now to be fair. Governments over the last hours, however long I can remember, have talked about this, haven't they? Loosening up the planning rules, the amount of homes that need to be built in Britain to satisfy demand and to make particularly homes for younger people and getting on the housing ladder, make that more achievable. And yet for some reason, or for many reasons we could go into, they've never managed to achieve that. No government managed to pull this off. Do you think things might be different now? They are talking about building hundreds of thousands of homes a year, lowering the regulations, the planning barriers to that. Is that actually achievable? As far as you can see?

[Stuart Hare]

It has to be. Quite frankly, we have a structural shortage in housing, both affordable and owner occupied housing in the UK which now creeps up at 1.5, some estimates have it up above 2 million. So we're structurally short of houses to house our population and we're very structurally short of both council and social affordable housing. So we do need to solve this problem. A lot of the reasons it hasn't been solved before is because you've not had almost. I don't want to pick a political side here, but you've not had a mission based agenda, you've had a series of agendas by ministry. So you might have had the environmental agenda with one agenda, which actually conflicted with planning etc. On the other. So you need stable government and you need this as a concerted effort and I'm hopeful all the right things are being said. But you need to marry up also central government, central planning and a degree of diktat to local government as well, that they can't just keep putting the brakes onto development. So you need central and local government working to quotas, working in collaboration to actually unlock the housing opportunities that do exist across the uk. The other thing I would say is there needs to be political will here. And what I mean by political will is I mean me and you, we need to be prepared to accept that there may well be housing developments near us and that might cause some short term impact, but ultimately it helps us long term because it makes a more thriving housing stock. It means our kids or our grandkids can get houses in the way that we probably could in the past. And it actually lifts the economy overall, which then helps to pay for the services like the NHS that we rely on. So we have to believe in this slightly more long term view. And if we do believe in that, we're going to probably have to make some politically short term difficult decisions around planning because everyone will agree planning reform is good until someone finds out there's a planning development eight streets away and then suddenly it's not such a good thing.

[David Merritt]

I mean, that has been the big problem, hasn't it? NIMBYISM or whatever you want to call it. But we've heard from Keir Starmer the need to build these new towns. But they're all in the south of England, aren't they? And they talk a lot about the Oxford Cambridge corridor is this other bit. You're talking to us today from Skipton. So the hometown for Skipton Group in the north of England and your affordability report talks about some of the areas where it is more affordable to buy home. Does the government need a better view of the whole of the country for this? It can't just all be about London and the Oxford Cambridge corridor.

[Stuart Hare]

Yeah, that's exactly right. Look, building new towns around economically high development areas is a sensible move, but it can't be the only move. You also have to create the mandate into the, as I said, the local areas so that they are not just blocking development. When you block development, the people that have houses ultimately get on paper wealthier because the house prices go up. And so there's a temptation to do that, but it's trying to release that temptation and create a mandate to create greater housing stock everywhere. Because if you've got places for people to come and stay, businesses will then start up, be them small businesses, be them medium businesses, because you then get the economic activity. If you don't create houses and if you don't create affordable housing situations with a longer term plan than just next year, the year after, then ultimately you don't get the shopping, the utilities, the schools built alongside them, which then creates the thriving communities which will level up our society. But levelling up isn't about levelling down London and the economic activities. You know, that's a fantastic engine of growth for the uk, a real asset for us. So it's not about distributing London's wealth, it's about creating new wealth into the outlying areas as well.

[David Merritt]

Stuart, your report talks about the huge variation across the country in terms of affordability. Can you talk a little bit about some of these regional disparities and if I'm a first time buyer, I should be moving and looking for a job so that I can afford a house.

[Stuart Hare]

So let me first of all explain a little bit the affordability index and then I'll relate it to different geographic areas. The index composed of two things. There's the price to live and that's your housing cost, that could be rental, et cetera. Everything that's about living in a house, your rents, your rates, your energy bills, et cetera. And what we're seeing is for 30% of people who are likely first time buyers, they are having to put, sorry, 40% are having to put more than 45% of their income into housing costs. That's unaffordable. So at that rate they can't save and therefore they can't get deposits and they can't then go on and buy their first house. The second bit is the affordability of the house itself. Should they have been able to save so that there's two legs to it. One's about living affordability and the other one is about the ability or the affordability of buying in the area. So we look at that through 363 local authority areas mapped to constituents in England, Wales and Scotland. And what it shows is there's quite a big disparity in terms of different locations. If you think about the places that are most affordable, I think some people would have in their head, or they're going to be rural, it's actually Scotland. And the reason Scotland is more affordable is the house prices are lower and the incomes, while not at anywhere near London levels or city levels, the incomes are reasonable. So the affordability both to live and then to buy is highest in places like Aberdeenshire. Now if I was to say to the average person in the uk, where's the least affordable? Almost everyone would jump to London or the southeast. That's not the case. It's actually Kennedigian, a local authoritarian in Wales. And why is that? The property prices aren't particularly high. They're marginally higher than some of the other places in Wales, but they're not particularly high. It's low income levels that actually restrict them. So people can't afford both to rent and then to live in that area. So every area has a different story when you look at the most affordable and you start to break down some substories. An example would be Manchester. Manchester city centre has become more affordable, more affordable houses have been built, incomes are better and so therefore it's supporting a slightly more thriving city. Centre economy. And so there are ways through this, but you need to be patient and you sometimes need to do things that aren't necessarily locally politically comfortable to the uk.

[David Merritt]

Can you talk a little bit briefly about London, then? Because we all think that London is the most unaffordable place for anyone to live and the gap is really there. But of course the jobs pay more here, so it's actually not as bad an offender on the affordability rankings as you might think.

[Stuart Hare]

Yeah, London is, as always, unusual in the same way as New York is, same way Sydney is and Tokyo is. There is higher income and so therefore, from an income perspective, there is more potential to stretch yourself to afford a home, usually not in your chosen local authority area. So I think if you're sitting in Putney going, I think I'll buy here, you might need to think a little bit further out. But there is pockets in London where you can get affordability of houses. Where London is really tough, though, is on renters, particularly renters closer to the centre, because the rental costs are very high and so therefore a number of London boroughs, particularly places like Westminster, for example, where the rental costs are exceptionally high and despite the higher incomes, they're still not high enough to be able to cope with that and still be able to save. Now, I say all of this about higher incomes. You've got to remember that a city like London also needs key workers. So these are the guys and girls who will basically take the rubbish away. They will man our hospitals, they will be in our schools. So it's all very well for the private sector to be paid more, but we need houses for those key workers as well. If not, there's no point in us staying there. So it's about balancing the ecosystem in London as much as anything else.

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[David Merritt]

Bit to talk about interest rates because rates have been rising and the bank of England is in a tough spot. They've been cutting rates this year, but that is not so far been fully feeding through to the market. So people taking out loans, people taking out mortgages. What's your outlook for interest rates this year? The bank of England are stuck, aren't they, between trying to support the economy and dealing with an inflation problem that still persists. And then you've got people struggling to afford to buy their first homes and could really benefit from low interest rates. But are they going to get them anytime soon?

[Stuart Hare]

Yeah, it's a perennial question. Are interest rates at an equilibrium point? The reality just now at 4.5 interest rates are restrictive. So they restrict growth, they encourage saving, they discourage borrowing, and so therefore by their very nature they are restrictive. I would argue two and a half. I think the bank of England suggests themselves two and a half to three is the sort of median point where you become accommodative to growth. And restrictive. When you're restrictive, you're trying to tame back inflation. So they're still in restrictive zone. The question is how fast they will come down into neutral and whether they would go below neutral. So my outlook on that is that interest rates will continue to come down this year. I anticipate two, maybe three further interest rate movements. So I would imagine that we will be ending the year perhaps with interest rates that start with a three. There's a lot of uncertainties around that. And actually inflation isn't necessarily the primary one. There are some drivers behind inflation. I think the recent increase in employers, national insurance isn't helpful to inflation because either it will reduce the number of jobs and the cost in your business or you'll have to increase price on the same volume of goods served. And so ultimately it's inflationary or likely to be inflationary. You've also importing some volatile inflation around oil prices, et cetera. If you look past all of that though, we are in a disinflationary cycle. So into the medium term we should be moving down into neutral. However, what people can't expect, I don't anticipate circumstances I'll ever get interest rates, you know, 2%, 1 1/2% again. So I would anticipate a longer run average and look, who knows what will be announced by the White House tomorrow. So you can never really predict things fully. But absent any major shocks, I think you're looking at longer term interest rates, two and a half, three percent somewhere around there to mean that they're monetarily neutral, which will allow the fiscal impetus to deliver the growth.

[David Merritt]

So assuming no other shocks, you see a gradual improvement. I think Bloomberg economics are still penciling in three more interest rate cuts of a quarter point each.

[Stuart Hare]

They sound wise. They sound wise people in.

[David Merritt]

Very wise. They're very clever, these folks. And as the year progresses again, barring other, no other shocks, which of course we may well get from unexpected quarters, but that's still restrictive, isn't it? And yet we are still seeing house prices holding up. How come?

[Stuart Hare]

It actually comes back to what I said before. Ultimately it's the basics of macroeconomics. You've got a supply shortage and you've got reasonably high demand. Demand will only increase as interest rates come down and the expectation of interest rates come down because you really price a mortgage off what you anticipate, or the market anticipates the interest rate being in a two or a five year cycle, if it's a two and a five year product. So as the market comes down, the cost of the mortgage goes down, demand will go up, but you've got a similar supply. So until we start building houses, you're always going to have a situation where the housing stock is unaffordable. Now there's two ways to fix that. You can start to create financial products that help people have a shared ownership aspiration or change the risk criteria in the mortgages. But it doesn't change the fundamental, it just creates more demand. So ultimately it could really just push the price up so there isn't any way around it. We need to build more into the uk and that's the reality for the UK economy. We need to find growth. And once you find internal growth, internal economic activity, you become a more attractive place for foreign direct investment. And so the whole thing starts to spin up. The reason we're so passionate about housing, first of all, we're a big player in housing, but also it's a fundamental, for a little bit, the psychology of the uk, your own house, et cetera, but also the economic activity within the uk. If we get building again, if we start to produce jobs from that, if we bring the skills in and the skills up, brings the employment, people buy things, it becomes a good place for industry to locate because they can put a new factory in and they'll have people with houses and schools. So everything starts to grow from that point.

[David Merritt]

Stuart here. Thank you so much for joining us on in the City.

[Stuart Hare]

Thank you.

[David Merritt]

Thanks for listening to this week's in the City from Bloomberg. This episode was hosted by me, David Merritt. In the City is produced by Soma Saadi and Moses Andan with sound design by Blake Maples. Brendan Francis Newnham is our executive producer and special thanks to Stuart Hare. Please subscribe, rate and review wherever you listen to podcast.

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