Severe housing shortage see England become the most difficult place in the developed world to find a home

New analysis from the Home Builders Federation has revealed that homes in England are less affordable and in worse condition than those in most other developed nations.

Related topics:  Construction,  Property,  housing
Property | Reporter
6th October 2023
construction UK
"Decades of housing undersupply has produced startling consequences for people up and down the country looking for a decent home"
- Stewart Baseley - HBF

Using data collated from the OECD, the European Union, and the UK Government, the Home Builders Federation has found that the UK has fallen far behind our competitors on affordability, condition, and housing age, with the full extent of the difficulties facing people in Britain trying to find somewhere to live laid bare in its report.

The HBF - the representative body of the home building industry in England and Wales – reveals for the first time that the extent of the housing shortage in England has made it the most difficult place in the developed world to find a home, with the lowest rate of available properties per member of the population of all OECD nations.

Between 2004 and 2021 the UK’s rate of home ownership fell by six percentage points from 71% to 65%. Over the same period, levels of home ownership grew by nearly 10 percentage points in France and by 15 percentage points in the Netherlands.

Despite manifesto commitments and repeated promises to boost numbers, the policy environment has slowed the delivery of new homes.

The UK remains a long way off from delivering the Government’s target of 300,000 new homes per year by the mid-2020s, with only 233,000 new homes completed in 2021-22 and delivery in the first half of 2023 down by 10%.

Analysis shows that record-breaking house building of 320,000 homes per year – nearly 100,000 more than current delivery – would be required for England to provide homes for its population in line with the benchmark for developed nations worldwide, the OECD.

Even just to reach the number of homes per thousand inhabitants of small European nations would require a significant increase in delivery. England would need to build 291,000 new homes every year until 2030 to reach the level of homes enjoyed by Belgium and 390,000 homes per year to be comparable to Denmark.

At a time when we desperately need to be building more homes, the impact of the faltering economy on people’s ability to buy and an increasingly anti-development approach to housing policy are resulting in supply falling sharply. Planning consents, a strong indicator of what will be built in the coming years, fell by 19% during the first six months of 2023 as compared to the same period last year.

Unaffordable

The average price of a property in England and Wales is more than eight times the average salary, making these staggeringly unaffordable places to live.

The data also shows that one in five people in Britain spend more than 40% of their post-tax income on housing. This amounts to 13.3 million people - more than anywhere else in Europe.

Even when looking at countries with similar reputations for unaffordable housing, the UK compares poorly, the analysis finds.

Denmark has one of the world’s most expensive and competitive property markets, with house prices rising faster than incomes in recent years, as shown by a rapid growth of 12% in the house price-to-income ratio between 2004 and 2021. However, this pales in comparison to England and Wales, where the ratio has grown by 37% over the same period.

Too old

The UK has some of the oldest housing stock in the developed world. Even despite historically high levels of housebuilding over the past decade, only 7% of British homes were built after 2001, far less than other countries like Spain, with 18.5%, and Portugal, with 16%.

Even countries with smaller economies in Eastern Europe perform better than the UK. Hungary, for example, has one of the lowest average annual incomes in Europe and a GDP 17 times smaller than the UK, yet Hungarian houses are much more modern than British ones.

Half of Hungarian homes were built after 1971, compared to only a third of the UK’s housing stock.

Poor condition

Unsurprisingly perhaps given the older housing stock, homes in England are also in much poorer condition than in other developed countries.

As of 2020, England had the highest proportion of inadequate housing in Europe, with 15% of all homes not meeting the Decent Homes Standard, a measure set by the Government which requires homes to be in a reasonable state of repair with reasonably modern facilities and services.

This means homes in England are in much worse condition than in Eastern European nations, including Lithuania, where 11% of homes are substandard, and Poland, where only 6% do not reach the required standard.

Stewart Baseley, Executive Chairman of the Home Builders Federation said:

“It is widely acknowledged that Britain’s housing is in crisis, but this research shows just how badly we are falling behind our international peers.

“Decades of housing undersupply has produced startling consequences for people up and down the country looking for a decent home.

“Home builders want to be able to deliver new, high quality, energy efficient homes which will help solve our country’s housing crisis, and they expanded investment over the past decade. Sadly, developers are still too often hampered by a restrictive planning system, an anti-development mindset and short-term politics trumping the needs of communities.

“The country is in dire need of more high quality and energy efficient new homes. With an election looming and manifestos being considered, today’s research should act as a wake-up call, demonstrating the urgent need to act now to prevent us from falling even further behind.”

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