This briefing paper considers key trends in housing supply in the UK and goes on to focus on some of the of the key barriers and potential solutions to increasing supply in England. It has been updated to include proposals in the Housing White Paper published in February 2017 and subsequent developments.Jump to full report >>
According to current projections, an average of 210,000 new households will form in England in each year between 2014 and 2039. In 2016/17, the total housing stock in England increased by around 217,000 residential dwellings: 15% higher than the previous year’s increase but short of the estimated 240-250,000 new homes needed to keep pace with household formation.
Housing need manifests itself in a variety of ways, such as increased levels of overcrowding, acute affordability issues, more young people living with their parents for longer periods, impaired labour mobility resulting in businesses finding it difficult to recruit and retain staff, and increased levels of homelessness.
The 2015 Government had a stated aim of achieving 1 million net additions to the housing stock by the end of the Parliament, which was expected to be in 2020. This translated into 200,000 additional homes per year. Net additions includes, for example, conversions and changes of use. Critics pointed out that the figure did not take account of the backlog of housing need. The House of Lords Select Committee on Economic Affairs concluded in Building More Homes (2016) that the target “was not based on a robust analysis” and went on to recommend that the housing crisis required the development of at least 300,000 new homes annually “for the foreseeable future.” In addition to questioning whether a target for 1 million homes is ambitious enough, there is some doubt over whether even this number is achievable.
The current Conservative Government was elected in 2017 with a manifesto pledge to meet the 2015 commitment to deliver 1 million homes by the end of 2020 and to “deliver half a million more by the end of 2022.”
There is general consensus around the long-term under-supply housing and the need to address this, but there is less agreement within the industry about how best to achieve the necessary step-change in supply. Commentators agree that there is no ‘silver bullet’ and call for a range of solutions across a number of policy areas.
The 2015 Government took action to stimulate housing supply through a variety of schemes. These schemes are referred to in the Government’s response to Building More Homes which acknowledged that “we have much more to do as a country to build more homes and that the Government has a role to play in making sure our housing market works for everyone.”
The 2017 UK Housing Review Briefing Paper (September 2017) argues that while supply is of critical importance, “so is the rather more neglected issue of affordability, in both the private and social housing sectors.”
The 2015 Government's Housing White Paper, Fixing our broken housing market was published in February 2017. It set out “a comprehensive package of reform to increase housing supply and halt the decline in housing affordability.”
The White Paper identified a threefold problem of “not enough local authorities planning for the homes they need; housebuilding that is simply too slow; and a construction industry that is too reliant on a small number of big players.” The White Paper focused on four main areas:
Consultation on proposals in chapters 1 and 2 of the White Paper closed on 2 May 2017. A separate consultation exercise on Planning and affordable housing for Build to Rent was launched alongside the White Paper, the outcome of which was published in August 2017. A summary of responses to the White Paper and the Government’s view on the way forward was published on 5 March 2018. This date also saw the launch of consultation on proposed changes to the National Planning Policy Framework (NPPF) and further consultation on reforming developer contributions to affordable housing and infrastructure.
This paper covers some of the of the key barriers and potential solutions to increasing supply in England. The paper takes account of the key measures announced in Fixing our broken housing market and subsequent developments. The barriers and solutions cover issues including:
Information on Government action to stimulate housing supply can be found in Library briefing paper 06416: Stimulating housing supply - Government initiatives (England). Other relevant Library papers include:
The charts below summarise some of the trends in new housing supply in England.
Housing supply looks very different now compared to 40 years ago. House building was much higher from the post-war period up to the 1970s, largely due to a programme of slum clearance and local authority building. The private sector now builds the majority of homes and conversion of existing property plays a much bigger role in increasing supply.
UK-wide statistics on housing are also available in this briefing and the associated tables. Use the downloads below for access to:
Commons Briefing papers CBP-7671
Authors: Cassie Barton; Wendy Wilson