The government’s solution to the housing crisis may be flawed, due to an oversimplified focus on boosting supply and a fall in the rate of household formation, new research suggests
The study, carried out by housing economist Neal Hudson of Residential Analysts and published by Sky News, suggests that a shortage of new homes being built is largely confined to London and surrounding areas and cities such as Oxford surrounded by green belt restrictions.
It also points to data from the Office for National Statistics that suggests household numbers are rising by about 159,000 a year, compared with the 210,000 a year that had been expected, suggesting that the government’s target of raising supply of new homes to 300,000 a year could be unnecessarily high.
Hudson said: ‘Housing is a complex and interconnected system within the economy and society. There is no simple single housing market.
‘It seems reasonable, given this complexity, to suggest that there is probably no simple single housing crisis. Instead what we are probably witnessing is multiple, overlapping issues that affect different parts of the country and different types of people in different ways and to varying degrees.’
As well as the ‘supply crisis’ seen in London and the South East, the analysis suggested four other simultaneous crises occurring in the UK. They are:
First, a crisis of demand, with homes left empty and derelict in areas such as former mining towns in Scotland and Wales.
Second, a distributional or ‘under-occupation’ crisis in wealthy areas, where homes are unevenly spread between well-off older people living in homes with empty spare bedrooms and those forced to rent because they cannot afford to buy a property.
Third, a ‘cost/credit’ crisis, in which high house prices make it harder for younger first-time buyers to get on the housing ladder, a phenomenon which is widespread across the country.
Fourth, a housing quality crisis, which the research said particularly affected the private rented sector, with period properties left to decay in some places. It named Ceredigion, Blackpool, Liverpool and Thanet as examples of the latter.