England is “the most difficult place in the developed world to find housing”, according to a new report by the Home Builders Federation (HBF).
According to the HBF, which used a mixture of UK government, European Union and OECD data, the country has fewer available properties than any other OECD country. English houses are also more likely to be in poor condition than those anywhere else in Europe, with 15% failing the Decent Homes Standard.
Homebuyers and renters in England are paying more for less too. 11.3 million people spend more than 40% of their income on housing – once again, more than anywhere else in Europe. The average price of a property in England and Wales is more than eight times the average salary.
Why so bad?
According to the HBF, it comes down to numbers. The UK has a chronic shortage of homes, estimated by the Centre for Cities at a staggering 4.3 million. The HBF says that 320,000 new homes would need to be built per year to catch up with OECD benchmarks. While the government’s former target of 300,000 homes per year was almost in line with what is needed, actual construction has not come close to that within this millennium, and numbers are now falling.
Not just bricks and mortar
Building more homes is one step towards solving the problem, but it would take time: the HBF’s target would get England in line with comparable countries only in 2030. Encouraging private rented sector investors, on the other hand, to buy or build more homes, could make a difference more quickly.
The private rented sector houses around 19% of English households, a number that has fallen from the peak in 2016-17 despite ongoing rises in demand, causing rents to skyrocket. Changes to tax and ongoing uncertainty over rental regulation have caused many landlords to downsize their portfolios, switch over to short-term lets, or quit the sector completely. Unless that trend is reversed, there will be fewer homes for those who can’t yet or don’t want to buy a home.
Involving housing experts in policymaking to avoid putting off investors could help with this. Propertymark has also called for a series of tax changes for landlords, including the reinstatement of mortgage interest tax relief, reducing capital gains tax thresholds, and making improvements to properties tax deductible.
Other housebuilding headlines
UK housebuilders welcome Keir Starmer’s pledge to develop new towns – Financial Times
UK construction dives amid housebuilding slump and HS2 pause – The Guardian