Housebuilding in the UK

Housing policy is a devolved matter, controlled by the constituent nations of the UK. While policies vary in each country in response to specific circumstances there are common themes in terms of the supply and affordability of housing. However, this Library Briefing focuses on the response of the UK Government’s approach to the housing market in England for which it has competence.

It is argued that the level of house building in England has failed to keep up with demand over a protracted period contributing to a housing shortage, and rising house prices. One basis for this argument is that the number of new homes completed annually has consistently failed to match the projected level of household formation. This has led experts to suggest that between 240,000 and 300,000 additional units per year are required to meet both new and historic demand. However, both the Government and industry experts highlight the fact that the level of new builds does not provide the full picture; there were 217,350 ‘net additional dwellings’, completed in 2016/17. These are considered the most accurate measurement of additional housing stock.

The use of household projection data on which to predict demand is also contested. While there are those who suggest current projections might underestimate demand due to the level of concealed households, there are others who contend that in fact the projected number of new households has consistently exceeded actual household formation.

The Government’s 2017 white paper on housing describes the housing market as ‘broken’, blaming the supply shortage, “for too long, we haven’t built enough homes”. The housebuilding market has come to be dominated by the private sector, led by ten large companies. While the private sector’s output is at record levels, public sector housebuilding has been in a long-term decline. The white paper outlines the Government’s plans to change (‘fix’) the market. It has called for a new approach to house building that includes: building homes based on need; building homes faster; diversifying the house building market; and by making it more affordable for people to buy homes.