It’s long been said that the UK has a housing crisis. That there are not enough homes to supply everyone who needs one. And that this housing crisis has led to house prices and rents being pushed up to levels that are unaffordable to many people in many parts of the country.
However, it has never been all that clear how big the UK housing crisis actually is.
Now some new research, The Housebuilding Crisis by the Centre for Cities, estimates that the UK housing crisis involves a shortage of 4.3 million homes across the country. And it outlines what it believes is the single cause of the crisis.
The UK housing shortage – 4.3 million homes
Here are some key points from this new report:
* It is often thought that fairly recent government policies have caused the housing crisis. But the report suggests that this is not actually the case. It says that the housing shortage began at the end of WWII, with the introduction of the Town and Country Planning Act 1947.
* The report says that housebuilding rates in England and Wales dropped by more than a third after the introduction of the Town and Country Planning Act 1947 – from 2% growth pa between 1856-1939 to 1.2% pa growth between 1947-2019.
* It suggests that tackling the housing crisis would require the building of 442,000 homes per year over the next 25 years – or 654,000 per year over the next decade in England alone.
* The report suggests that the UK planning system is clearly to blame for the housing crisis. This has caused UK housebuilding to fall behind comparable European averages. It says that the current system which allows planning applications to be decided on a case by case basis is too discretionary and too uncertain and that this stifles new housebuilding.
* It suggests that reform of the planning system in the UK is key towards solving the housing crisis. It recommends that a zonal planning system, where development is automatically allowed in a zone so long as it complies with certain rules for that zone, would be a possible solution.
Other recommendations include combining local planning and transport planning, reforming developer contributions towards local government and taking local views and objections into account before planning applications are made rather than after as now.
* The report says that both more private housing as well as more council or social housing is needed to solve the housing crisis, but that more private housing is particularly critical.
Some thoughts on The Housebuilding Crisis
When considering this report, it’s important to recognise that it is clearly designed to support a planning reform agenda – something that was put forward under Prime Minister Boris Johnson’s administration but which has not been taken forward.
While planning reform is entirely valid as a reason for the housing crisis it is also important to release that it is not the only reason why insufficient houses have been built to satisfy demand. Building more houses is about wider politics, not merely planning. It is about land being physically available – some parts of the country do not have sufficient land regardless of planning. It is about developers being willing to develop, and being able to finance development. It is about an adequate supply of building materials and labour, and the cost of them. Last but not least it is about end buyers wanting to buy, and about being able to borrow and afford to repay the money to do so.
The report should, nevertheless, be commended for coming up with a carefully considered estimate for the size of the housing shortage.
The report will, no doubt, be something that many people (particularly politicians perhaps) will not want to hear. It suggests that the UK housing shortage is so big that it is unlikely ever to be solved.
About the Centre for Cities
The Centre for Cities is a research and policy institute which serves to improve the economic success of UK cities. It is a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies, and does so through providing impartial research and knowledge exchange.
You can find more details about the research, the methodology used, and obtain a full copy of the report from the Centre for Cities website here:
The Housebuilding Crisis