Urbanisation & Housing

Housing Affordability Crisis

The question
In many large cities, the cost of housing has risen to the point where ordinary workers can no longer afford to live there. Why is this happening, and what can be done to solve the problem?

Band 9 model answer

In the world's leading cities, the dream of owning, or even renting, a modest home has slipped beyond the reach of nurses, teachers and the very workers those cities depend on. This essay explores the roots of the crisis and outlines how it might be eased.

The principal cause is a stark mismatch between supply and demand. Populations swell as people chase jobs, yet construction lags far behind, restricted by scarce land, sluggish planning approval and resistance from existing residents. Compounding this, property has become a speculative asset: wealthy investors purchase homes purely to profit from rising prices, leaving flats empty and inflating costs for those who actually need to live in them. The result is that wages simply cannot keep pace with rents.

Solving the problem demands action on both fronts simultaneously. On supply, authorities should streamline planning rules and release public land for high-density development, prioritising affordable units within every new scheme. On demand, taxing vacant second homes and curbing purely speculative purchases would discourage treating housing as a commodity rather than a necessity. Some cities have already shown that rent regulation, applied carefully, can shield tenants without deterring builders entirely.

To conclude, soaring housing costs arise from insufficient construction colliding with rampant speculation. Only a twin strategy, building far more while dampening investor demand, can restore the principle that those who keep a city running should be able to afford a place within it.

Examiner’s notes

Power words for this topic

speculative
bought in the hope of making profit from price rises
In a sentenceSpeculative buyers leave many city flats empty.
mismatch
a failure of two things to correspond
In a sentenceA mismatch between supply and demand drives rents up.
streamline
to make a process simpler and more efficient
In a sentenceAuthorities should streamline planning rules.
commodity
a thing traded purely for profit
In a sentenceHousing is increasingly treated as a commodity.