More houses are needed in the UK

Housing is a hot topic. There is widespread recognition that we need to build more homes in areas of most need. But the question of ‘how’ is more nuanced. The debate gained further momentum last month as the DCLG released a consultation on a new method to calculate ‘housing need’ within local authorities. This consultation suggests a methodology where the need for housing factors in affordability levels in each borough as well as population growth projections.

Sajid Javid, the communities secretary, was quick to point out that ‘housing need’ was not a hard and fast housing target, but some Local Authorities will be looking at new calculations showing that the need for new homes in their borough is set to rise dramatically.

Across the country, housebuilding has been increasing in recent years. The number of new homes completed in 2016/17 was up 37% compared to 2012/13. The number of ‘Net Additions’, the number of new homes brought into use through change of use or conversion as well as via housebuilding, is expected to be more than 200,000 in 2016/17, a key milestone compared to the 125,000 Net Additions seen in 2012/13.

Housing starts are also rising, up 57% over the last five years, suggesting a continued increase in completions in the years to come. However, total completions are still likely to be well short of the 250,000 annual target for new homes. Even if the 250,000 target is met, this will do little to address the structural historical undersupply seen in the last few decades.

Also, at a local level, some contrasting trends are emerging. In London, housing starts have fallen from a high seen in 2015, sliding by more than 20% in the year to the end of April compared to the previous 12 months, according to data from DCLG.

There is no ‘silver bullet’ solution to increasing the supply of housing, a fact that was reflected in the Housing White Paper, published earlier this year. The sheer range of topics covered in the paper, from the Green Belt to construction skills, illustrated that addressing the undersupply of housing needs to be a multi-pronged process.

However, recent pledges by the Mayor of London and the Housing Minister to look at creating new housing across all tenures, including Build-to-Rent or Multihousing, is certainly welcome. Likewise, a recognition in the housing needs consultation that the age of the population should be taken into consideration when planning housing is also key.

Ultimately building more housing is the aim, but building it across all tenures to match the housing need of all age groups will enable more movement in the market, and enable the most efficient use of space in order to ensure as many people as possible have access to the housing they need and want.


Join Gráinne at MIPIM UK on October 18th as she asks a panel of leading experts from the private sector and Government about these, and other key issues, facing the housing market.


Photo credits: © Getty Images / evgenyatamanenko

About Author

Grainne Gilmore

Partner, Head of UK Residential Research, Knight Frank

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