Why is the UK not building more homes?

17 February 2017

Mel Clinton and Mike Fox discuss reasons for the lack of new homes in the UK. First published in Business Leader magazine (issue 17: Jan-March 2017).

Housing meets a basic need. Done well, it helps places, communities and economies to thrive. However, it has become inaccessible to many. From the early 1950s to the early 1980s the UK built between 200,000 and 300,000 new homes pa. Now it is around 150,000. And, it’s not just about numbers – quality is important too. For example, the average new home in the UK is about 76m2 compared to 116m2 in the Netherlands, a country with a higher density of population. Why is this?

The planning system has tended to be the main target for blame. In some respects, this is justified. It is vital that we plan for sufficient homes at the local level. We also need to recapture the role of planning as a bold and positive tool for change. This requires infrastructure, particularly good public transport, to support new homes in compact settlements and the acceptance of growth by communities. Here, operation of the land-market is not helpful in bidding-up values to a point where costs impact on quality and infrastructure provision. Better models are needed to capture some of the value created for investment in infrastructure and neighbourhood quality.

Diversity of supply is also key. Currently the major housebuilders shoulder the main burden with the number of small builders having declined significantly. Local authority housebuilding also declined dramatically in the early 1980s. Since then, public money has increasingly gone towards housing benefit rather than bricks and mortar. Now, however, Councils are starting to build again.  Despite Treasury controls, Councils are using their land assets, setting up housing delivery companies and partnering with the private sector.

Custom-build enables households to have greater say over home design and specification, but accounts for only around 8-9% of new homes in the UK versus 30% and above in other countries. Increasing scale and ambition is a priority for the Government and is something we are working on at Nash Partnership.

Good quality rental accommodation is also needed and the growth of the private rental sector reflects this. The emergence of the co-living market, providing compact, contemporary self-contained accommodation with inclusive services and shared facilities such as gyms, cafes and lounges also signals a growing response to the diversity of need.

Change and innovation appears to be happening but we’ve a long way to go and need to maintain focus to harness the resources and expertise of the private, public and community sectors.

– Mel Clinton (left – Director of Planning and Regeneration) and Mike Fox (right – Director of Planning).