‘Hopelessly inadequate housing supply and affordability crisis’

The first analysis of the Census 2011 and its impact on household formation has been published by leading housing and planning charity, the Town and Country Planning Association (TCPA) and shows that the scale of housing need and demand continues to significantly outstrip supply.

The report, “New estimates of housing demand and need in England, 2011 to 2031”, by the renowned housing academic, Dr Alan Holmans, from the Cambridge Centre for Housing and Planning Research at Cambridge University, shows that housing requirements are on average around 240,000 – 245,000 per year, with around 60% of all demand and need in the four southern regions. This is up to 10,000 more homes per year than the generally used 235,000 figure; while house-building levels are slowing rising from their lowest levels since the 1920s, at around 100,000 per year.

Kate Henderson, TCPA Chief Executive said: “This research – the first of its kind to analyse the Census 2011 data – is a crucial reminder of the desperate need for more and better housing in the right places. We have a hopelessly inadequate supply of housing and a serious backlog, as well as chronic affordability problems.

“While house-building levels remain at about 100,000 per year, the Census reveals a staggering need for over 240,000 homes per year.  The research also shows that nearly one third of newly arising housing need requires some subsidy; without this investment affordability, overcrowding and ultimately homelessness will worsen.

“We urgently need a new vision for housing and the development of new communities. That new vision has to ensure a substantial increase in the supply of new homes and address affordability. At the same time, we must focus on building successful new communities, whether as part of urban regeneration or through new Garden Cities. This is essential not just to our economic future but also the social and environmental wellbeing of our country.”

The figures make projections for 2021 and extend them to 2031 to enable longer term decisions for land use management, planning and local government. A selection of headline findings from the report are set out below:

1 National demand and need The analysis presented in this paper suggests that, even if the economy remains depressed and household formation rates remain low, there will still be almost a 20% increase in the number of households over the 20-year period to 2031. This is mainly because of the expected continued growth in population. The projections in the report, together with adjustments for gains, losses and vacancies in stock, suggest that over 240,000 additional homes will be required to meet newly arising demand and need.

2 Type of household demand and need There was an abrupt break with longer term trends in household formation in England between 2001 and 2011. To take the most obvious example, the number of one-person households in 2011 according to the Census was nearly one million lower than the 2008-based projections published by DCLG in 2011.

Other large-scale shifts in the mix of household types include far more couple-plus-other-adult households than expected. In part this is about younger people staying at home or sharing accommodation for longer. But that is not the whole story as changes are observed in all age groups.

3 Tenure of housing demand and need Applying past trends based mainly on household composition would suggest that some 68% of new households would be in the market sector (owner occupation or private market renting without benefits), but that housing to meet nearly one third of newly arising need would require some subsidy.

4 Regional variations in housing demand and need At regional level, not far short of a quarter of all housing demand and need is likely to be concentrated in London, with over 60% in the four southern regions. But all regions require significant additional housing investment.

Professor Christine Whitehead, who was involved in the research that lies behind the report, said: “It is enormously important that we plan for recovery and deliver much higher output levels. Otherwise if recovery happens increasing house prices will worsen affordability. Planning based on the past few years of recession will simply build in the next crisis.”

Have your say on this story using the comment section below

One thought on “‘Hopelessly inadequate housing supply and affordability crisis’

  1. IPIN Global

    Whilst the points on their own stack up and make a very presentable case for more building – it still doesn’t paint the entire picture with respect to house prices being as unaffordable as they are. Historically government data shows that even during periods of extensive house building across all sectors – prices have still risen (See: http://www.ipinglobal.com/ipin-live/406685/will-more-house-building-really-ease-house-prices ) – suggesting something more than just supply levels is at play here.

    Mortgage lending would appear to be the culprit in this case – rising loan to value rates and lower deposit levels both heavily contributing to the problem. Building more houses alone is not sufficient (and not likely possible to build sufficient numbers quick enough) to deal with the problem.

Comments are closed.