Britain’s Housing Dilemma
A new report from Minerva Lending shows that despite initiatives to improve Britain’s housing shortage the supply is still well short of meeting demand. Communities that are experiencing economic expansion are only able to provide one new home for every 23 new residents. It is estimated that only three in 100 UK towns are constructing enough houses to provide for the population growth.
For the period of 2011 and 2016, data shows that Britain's largest cities have added nearly 1.6 million people with only 405,000 new homes constructed or one for every four new residents.
Ross Andrews, director of Minerva Lending, says in HRD Director:
“We’ve known for many years that the housing supply situation in Britain is poor but this road to ruin of inadequate building is going to end the dream of home ownership for many millions of people over the next 20 years.
“One in 200 people in England is reportedly already homeless. That is already a national emergency that will only be exacerbated if the government does not deliver a housing strategy that works soon.
“With the Budget just two weeks away, the Chancellor should consider extreme measures to boost building before the housing crisis we all recognise spirals further out of control.
“Much is made of the number of long-term empty homes, which topped 200,000 alone in England last year, but figures showing the amount of unused commercial office space going to waste are much harder to come by.
“Light-touch planning permission for office-to-resi conversions is having a growing impact on the sector but it can only be one ingredient in a solution capable of defeating a problem as big as a broken housing market exacerbated by the cyclical nature of housebuilding.
“Property developers often struggle to raise enough funds from traditional lenders so it’s vital, if conversions are going to play a bigger role, that it is made as easy as possible for investors to target the problem with their capital.”
The office of National Statistics reports that data for the city of Belfast has become the fastest growing city for the UK and providing the fewest homes needed to meet the population growth. Only one new home is being created for 23 new residents with its population increasing by 21% with 58,617 people between 2011 and 2016. For this period only 2,585 new homes were built being far short of what is needed for residents.
The report expects property conversions will play an increasing role in helping to provide the much needed housing not only for Belfast but for all of the UK.
The critical shortage after Belfast can be found in Luton and Manchester where only one home for has been built for every eight residents.
The city of Coventry is the second for the fastest growth of its local market with the population now rising to 35,951 over the past five years. Only one new home has become available for every seven new residents with only 5,390 homes built.
As expected London continues to see growth and is ranked in sixth place for fastest growing metropolitan areas. The population of the capital is 613,951 an increase of 7.5% between the period of 2011 and 2016. The city is well known for the shortage of housing and the affordability with only 124,020 new homes being built or only one for every five new residents over the past five years.
But not all towns or cities are experiencing growth but rather are shrinking. Blackpool has seen its population drop 2% or 2,870 between 2011 and 2016. The current population is estimated to be 139,578 with only 710 new homes made available for residents.
Second on the list for a declining population is Blackburn which saw a 0.3% decrease from 147,489 to 147,049 with 820 new homes made available.
The report states:
‘This finding suggests developers are not being properly incentivised to build where it is most urgently needed.’
As for the North-South divide in Britain:
‘... is alive and well with eight of the top ten slowest growing towns or cities located north of the Watford Gap, while eight of the top ten fastest growing towns and cities lie in the South.’
Speaking an interview with the Daily Mail, Baroness Altmann, the former pensions minister, said:
'We've got a serious housing crisis in this country.
'I would like to see the Government encourage pension funds to invest in new homes because we have not invested enough for a long time.
'We've had promises of new homes for years but we need to get on with it; we need spades in the ground.'
Also in the Daily Mail Paul Broadhead, head of policy at trade body the Building Societies Association, says:
'We have been underbuilding for decades.'
'The Government promised a raft of measures to deal with the issue but so far we've seen nothing – we've got to get on with it.
'The only way we are going to build enough homes is if the Government starts directly commissioning the building of new homes.'
Attention will be given to Chancellor Phillip Hammond on announcing the budget and perhaps what will available for the housing sector on Wednesday. Business Insider predicts:
‘Hammond is believed to favour allowing building on the so-called green belt land — undeveloped and often agricultural land surrounding urban areas — as a means for allowing more homes to be built, alleviating some of the pressure on the housing market.’
In a recent speech in Barnet, North London the Prime Minister Theresa May said:
'We must get back into the business of building the good quality new homes for people who need them most.
'That is why I have made it my mission to build the homes the country needs and take personal charge of the Government's response.'
Ross Andrews, of Minerva Lending predicts:
'The lack of housing supply is turning into a national emergency that will only get worse if the Government doesn't deliver a housing strategy that works soon.
'If we don't do something soon then the dream of homeownership will be dashed for millions of people over the coming decades.'
Home Builders Federation, reports that new home supply has increased 74 per cent in the past four years but sys the government needs to provide more assistance.
'We need to see Government continuing to develop policies that allow builders large and small to deliver a mix of home types and certainty over the future of the hugely successful Help to Buy scheme that enables first-time buyers to buy a home.'
'We also need to see the planning system sped up so it doesn't take so long for builders to be able to actually get on site and start building; and we need to see local authorities and residents being positive about housing and working together to bring forward desperately needed developments.'