England has encountered a rift between new build completions and new households being added to the population after a slow output in the housebuilding sector for over a decade, according to Search Acumen.
Using official figures from the UK government and the Office for National Statistics (ONS), the conveyancing search provider uncovered England’s new homes shortfall, which has been cumulative since 2005.
Over a decade ago, England had a shortfall of more than 530,000 new homes, with projections for the next five years predicting a shortfall of another 500,000 new homes as the gap continues to increase.
Search Acumen compared the volume of new home completions in England each year since 1976 with new homes needed to accommodate the developing number of households over the same period.
After assessing annual ONS birth, death and migration data to estimate household growth, it used the ONS’ average number of people deemed a household to decide how many new dwellings would meet the extra demand.
“The housing market in all corners of England has ground to a halt as people struggle to find a home that fits their needs and their budgets,” Andrew Lloyd, managing director of Search Acumen, commented.
“Our research suggests that, even with housing supposedly higher up the political agenda, the pledges made at the last election won’t do the job of keeping up with demand in the long-term after years of under-investment into new housing.”
According to the data, new household creations in the mid-noughties outpaced supply for the first time in three decades – as the population in England increased, this trend soon accelerated.
The average UK household size reduced by 16%, from 2.78 persons in 1976 to 2.34 in 2016, which exacerbated the drop, meaning that more but smaller households put increasing demand on property supply.
During the 2017 general election, both the Conservatives and Labour parties pledged to increase new home builds between 2017 and 2022. Search Acumen compared these pledges – 300,000 and 200,000 completed new homes each year over a five-year period – to its findings.
The results showed that the Tories’ pledge to 300,000 homes per year was only a short-term solution to the current shortfall.
Between 2005 and 2016, over 530,000 too few homes were built to meet growing demand – a result of the shortfall in supply created by the slowdown in new house builds.
Lloyd added: “As supply has weakened, demand continues unabated with more dispersed households, an increasing number of births, and net migration unlikely to be affected by Brexit and proposed changes to border controls.”
“We face a future where first-time buyers are further squeezed by rising prices, and where those already on the ladder looking for an affordable home simply cannot.”
Search Acumen’s research also highlighted how many homes would be completed and how many more households would be created each year if trends were to continue, reaching the conclusion that England would need an additional 510,000 homes to meet demand. On top of the current fall, this means England could potentially have a shortfall of over one million homes by 2022.
On the possibility of finding space to build a million more homes, Search Acumen assessed brownfield and green belt land. Government figures show there are currently more than 31,000 hectares of brownfield land in England that is suitable to build homes on.
Housebuilders were able to build 37 domiciles per hectare on brownfield land in 2015. Given this, Search Acumen’s analysis suggests that there is enough land in England to meet cumulative demand for accommodation for the next five years.
What’s more, Search Acumen judged the amount of green belt land that could be affected. Research found that if housebuilders continued to build 14 domiciles per hectare on more than 1.1 million hectares of green belt land in England, 14% of all green belt land would have to be turned over to developers in order to meet cumulative demand into 2047.
“To make up for years of under supply, we need to embark on the greatest housing boom this country has seen in a century,” Lloyd theorised. “But it is possible: we have the space, we have the desire and we have tens of thousands of housing professionals in the private and public sector ready to go.”
“We just need our leaders to share our industry’s sense of urgency and begin laying foundations for economic success right away.”