With a Housing White Paper around the corner, we’ve published a briefing paper that considers some current issues with housing supply and how they might be tackled.
Here’s what you need to know about housing supply in England in five charts.
Are we building enough houses?
‘Enough’ is a tricky concept to measure because it means deciding how much housing we’re going to need in the future. Forecasting how many new households there will be is difficult, and there’s also an existing backlog of housing need: homeless people and those living in unaffordable, unsuitable or overcrowded homes.
Official estimates put England’s housing need at somewhere between 240,000 and 300,000 new homes per year.
So is new supply of housing approaching this level? Our best estimates suggest not. Around 190,000 new homes were created in England in 2015-16 once you factor in building, conversion and demolition.
Where do new houses come from?
Conversations about housing supply usually come back to the question of how many homes we’re actually building.
The number of new houses built has fallen considerably since the post-war period. In the sixties and seventies, government subsidies encouraged local authorities to build but this policy climate didn’t last – and building by local authorities has now plummeted.
The majority of homes are now built by the private sector. Housing associations (privately-owned providers of social housing) have picked up some of the slack, but don’t build to the same extent as local authorities at their peak. And as a result, the number of houses being built is lower.
Building new houses isn’t everything, though. When building was high in the seventies there was also a lot of slum clearance going on – the goal was to improve the quality, not just the quantity, of England’s housing stock.
These days we demolish far fewer homes. We also gain more homes through conversions (e.g. splitting a house into flats) and change-of-use (using commercial property). Historical sources suggest that the yearly average supply in the seventies – factoring in building, conversions and demolitions – was not much higher than last year’s total.
Of course, building will always make up the bulk of new housing supply. And that means we’d be a lot closer to meeting estimated need if we built at a rate more like the past.
What kind of housing do we have now?
At the time of the 1981 Census most households (58%) were home-owners, as they are today (65% were in 2011). But social renting was the second most popular option (31%), beating private renting by a wide margin (11%).
This balance has changed. The most recent Census showed that the social rented sector housed a much smaller proportion of households (17% in 2011), while 18% rented privately. Similarly, English Housing Survey estimates suggest 19% of households rented privately in 2014-15.
This move away from social renting was partly caused by the reduction in local authority building, as well as policies like Right-to-Buy which move existing social housing stock out of the sector.
What can be done to boost housing supply?
There’s no ‘silver bullet’ that will get more houses built. Our briefing paper, Tackling the under-supply of housing in England, looks at some of the suggested solutions, including:
- Improving the contribution of local authorities and housing associations, e.g. by reforming the rules around local authority borrowing.
- Releasing more land at an affordable price and creating more transparency in the land market.
- Reforming the planning system, incentivising planning departments and communities to approve new developments.
- Ensuring the construction industry has the capacity to build enough homes, and making the market easier for small and medium sized building firms to navigate.
The paper also includes a digest of housing supply statistics for the UK. If you’re interested in what the housing supply picture looks like in your area, we also have a local housing statistics tool that lets you compare a selection of local authorities.
Chart sources: 1) DCLG, Live Table 120. 2) and 3) DCLG, Live Table 209. 4) DCLG, Live Table 120 and Holmans, Historical Statistics of Housing in Great Britain. 5) DCLG, Live Table 104.
Picture Credit: “lunch break on the construction site” by Patrick Mackie (Creative Commons Attribution-ShareAlike 2.0 Generic)