"I believe this is an inflexion point for the sector. Post-war, we saw government-funded Local Authorities creating a housing boom – something we are about to see again under Labour, driven by social need, not private enterprise"
- Andrew Lloyd - Search Acumen
The shortfall between social and affordable housing delivery and the growth in the non-working population has reached its widest point since 2019, according to new research from Search Acumen.
The analysis shows the gap widened by 173% in the past year, with new social and affordable homes being outnumbered by additional non-working people — those aged 16 to 64 who are economically inactive — by a ratio of 12 to 1. This group, the report notes, is often most in need of social housing.
Search Acumen estimates the gap could equate to a shortfall of 296,606 affordable and social homes in England in 2024. Since 2019, the rise in economically inactive people has been nearly ten times greater than the increase in the working-age population.
While the figures focus on England, the firm says the trend reflects broader issues facing the UK’s housing sector. It points to 2023 recording the fastest population growth in more than 75 years, alongside a sharp fall in affordable housing delivery.
Affordable home build starts dropped by nearly 40% in 2024, the steepest annual decline in a decade and the lowest figure since records began in 2015.
London saw the most significant fall, with starts down 88% between 2022 and 2024. Affordable Rent starts in the capital fell to just nine units, a drop attributed to the end of the 2016–23 Affordable Homes Programme, the main funding source for that tenure.
Andrew Lloyd, Managing Director at Search Acumen, said: “Our research looks at trends as to whether we are building enough homes fast enough. We know the answer to this to be no, but what is troubling is just how far behind we really are."
"In England, there were approximately 4.5 million social homes, down from 5.5 million in 1979, thanks to long-term losses in demolitions, conversions, and inadequate rebuilding. Looking at social rent alone, over the past decade, there was a net loss of 177,500 homes in England; meanwhile, the waiting list climbed to 1.33 million households last year, up 10% since 2022."
"Forecasts suggest this could rise to 2 million households by 2034 if social homebuilding stays unchanged. With a growing base of people not working, the mismatch between supply and demand is acute.”
He added: “For the current government, closing this gap will be hard, but Labour is keen to prove itself and show results within its electoral term. There is hope things will change, but the complex economic backdrop of tighter margins, inflated costs and skill pressures on housebuilders weighs heavily against social need.”
Search Acumen’s research also shows that major residential planning permissions in England, often including affordable housing via Section 106 agreements, have fallen 41% from their 2016–2018 peaks.
Lloyd said, “I believe this is an inflexion point for the sector. Post-war, we saw government-funded Local Authorities creating a housing boom – something we are about to see again under Labour, driven by social need, not private enterprise.”
The government’s £39 billion Social and Affordable Homes programme, announced earlier this year, is expected to drive increased activity over the next 18 months. Lloyd predicts the impact could be reflected in official data from 2025, with a potential surge in demand from housing associations, local authorities and other registered providers later that year.
He added: “Whilst the working population rate is declining against a general ageing population that is demanding more of social care, it begs the question: where will people live. As the commercial viability of building large-scale developments is coming under more and more scrutiny with the end of Help-to-Buy and ever-tightening profit margins, the social housing need must be met instead by the public sector."
"Whilst it is socially responsible to build affordable homes, it may not be profitable – this means the government have a duty to act with more funded schemes likely to fill the void.”
The report also highlights long-term reductions in local authority planning resources. According to the Institute for Fiscal Studies, real-term spending per person on planning and development services has fallen by 59% since 2010. Lloyd says the sector will need to lean heavily on technology to offset skills and resource shortages.
“Lawyers on both sides of the transaction must use technology to plug the gap, there is no doubt about it,” he said. “To work on social housing caseloads means high volume and low margins, where AI tools become business critical for lawyers to win at tender. Simply put, technology is the only way we are going to be able to deliver any large quantity of houses at pace and within the current government.”
