The UK is among the worst across the developed world when it comes to housing, suggests a report from the Home Builders Federation, but will politicians take heed?
Homes in England are less affordable and in worse condition than those in most other developed nations, a new report claims.
Analysis from the Home Builders Federation (HBF) – the representative body of the home building industry in England and Wales – is said to reveal the full extent of the difficulties facing people in Britain trying to find somewhere to live that is decent and affordable.
Using data collated from the OECD, the European Union, and the UK government, the Housing Horizons report finds that:
- England’s severe shortage of housing 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
- England has the highest proportion of inadequate housing in Europe, with 15% of all existing homes not meeting the Decent Homes Standard, and more substandard homes than Hungary, Poland and Lithuania
- The UK has some of the oldest housing stock in the developed world with only 7% of British homes built after 2001, far less than other countries like Spain, with 18.5%, and Portugal, with 16%
Boosting home ownership has been a key ambition for politicians – Conservative and Labour alike – for decades, yet the HBF says its research shows this is becoming “increasingly unachievable” for many as house prices continue to outstrip incomes.
According to the report, the UK has fallen behind its competitors on affordability, condition, and housing age.
Given the perennial stream of headlines detailing Britain’s multi-faceted and chronic housing crisis, such findings should doubtless come as little surprise.
As Stewart Baseley, the HBF’s executive chairman, 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.”
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 HBF says.
Furthermore, the UK remains a “long way off” 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.
According to the HBF, 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, it claims.
“The country is in dire need of more high quality and energy efficient new homes.”Stewart Baseley
Priced out of home
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 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.
The UK has some of the oldest housing stock in the developed world, the report goes on; again hardly a surprise.
Even so, 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 – once under the away of the Soviet Union – perform better than the UK, the HBF reports says.
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.
Inevitably, perhaps, given the older housing stock, homes in England are also of 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. This is 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.
For Baseley, a large part of the problem lies with the planning system, and – naturally – politics.
“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,” he said.
“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, [this] research should act as a wake-up call, demonstrating the urgent need to act now to prevent us falling even further behind.”
Responding to the report, David Hannah, group chairman of property tax specialists, Cornerstone Tax, said: “We are currently experiencing a chronic undersupply of housing in the UK due to the failed promises year-on-year by government’s past and present to build new homes.
“A continuation of this will mean that housing will become even more unaffordable. This comes amidst the fluctuation of mortgage rates, and now, first-time buyers will likely need help from family finding an available property which they can afford – if they are fortunate enough to have that financial support.
“We have now reached a point where the market is so strained from lack of stock – those renting or looking to rent are entering a highly competitive market, as many are willing to compete and outbid on rent prices – this is turning into a dire situation, which requires urgent intervention from the government to ease the pressures which people are facing across the country.”
Sadly, however, it has long-seemed that politicians are more focused on fighting for election, rather than the unglamorous business of housing their constituents. One wonders, for how long can that go on?
Image credit: Anton Watman/Shutterstock
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