House of Commons Library

Tackling the under-supply of housing in England

Published Monday, December 10, 2018

This briefing paper considers key trends in housing supply in the UK and goes on to focus on some of the key barriers and potential solutions to increasing supply in England. It summarises proposals set out in the Housing White Paper published in February 2017 and has been updated to take account of subsequent developments.

Jump to full report >>

Failing to meet housing need

Estimates have put the number of new homes needed in England at between 240,000 and 340,000 per year, accounting for new household formation and a backlog of existing need for suitable housing. In 2017/18, the total housing stock in England increased by around 222,000 homes. This was 2% higher than the year before – and the amount of new homes supplied annually has been growing for several years – but is still lower than estimated need.

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 Government's ambition: 1 million net additions by 2020 and half a million more by the end of 2022

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.”

No 'silver bullet' to increase housing supply

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.”

An increased focus on affordability

The 2017 UK Housing Review Briefing Paper (September 2017) argued that while supply is of critical importance, “so is the rather more neglected issue of affordability, in both the private and social housing sectors.”

In the foreword to the June 2017 IPPR report, What more can be done to build the homes we need? Sir Michael Lyons said: “We would stress that it is not just the number built but also the balance of tenures and affordability which need to be thought through for an effective housing strategy.”

The Housing White Paper 2017

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:

  • Building the right homes in the right places.
  • Building them faster.
  • Widening the range of builders and construction methods.
  • ‘Helping people now’ including investing in new affordable housing and preventing homelessness.

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. A revised NPPF together with associated planning guidance was published on 24 July 2018. The Government response to reforming developer contributions was published in October 2018.

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:

  • The potential contribution of the local authority and housing association sectors. The delivery of more than 200,000 homes per year in England has, since 1939, only happened largely as a result of major public sector (local authority) housebuilding programmes.
  • How to ensure that more land suitable for development is brought forward at a reasonable price, including how more public land can brought forward more quickly.
  • How to properly resource local authority planning departments and tackle a planning system that is widely seen as slow, costly and complex. There is some agreement on the need to incentivise authorities and communities to approve development, and for measures to encourage developers to build-out permissioned land without unnecessary delays.
  • Consideration of how essential infrastructure to support housing development can be funded.
  • How to encourage and support more small and medium sized building firms into a market that is currently dominated by a small number of large companies.
  • How to ensure that the construction industry is in a fit state to deliver the housebuilding capacity that England requires. The Government commissioned Farmer Review of the UK Construction Labour Model (2016) concluded that “many features of the industry are synonymous with a sick, or even a dying patient.”

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:

In charts: trends in housing supply in England

Estimates put the number of new homes needed per year at between 240,000 and 340,000. New supply of housing has been increasing, but hasn't reached this level.

Housebuilding is now lower than its peak in the late 1960s. But it has recovered from its low point, which happened in 2010 after the financial crisis.

The proportion of homes built by local authorities has also fallen since the 1970s. At the same time, the proportion built by housing associations has risen.

The net supply of new housing was higher in 2017-18 than the estimated average from the 1970s. While there were fewer new build completions, there was also less demolition and more change-of-use of existing buildings.

See sections 1 and 2 of the full briefing for sources.

Housing statistics for the UK

UK-wide statistics on housing are also available in this briefing and the associated tables. Use the downloads below for data on:

  • Housing expenditure in the UK
  • House building statistics for England, Wales, Scotland and Northern Ireland
  • Housing stock at census years for England, Wales and Scotland
  • Historic statistics on net change in housing supply for England

Commons Briefing papers CBP-7671

Authors: Cassie Barton; Wendy Wilson

Topics: Housing, Housing supply, Planning

Share this page

Stay up to date

  • Subscribe to RSS feed Subscribe to Email alerts Commons Briefing papers

House of Commons Library

The House of Commons Library provides research, analysis and information services for MPs and their staff.