The UK is in the midst of a housing crisis. Our population is growing faster than our housing stock which means that there is upward pressure on house prices.
This in turn means that a whole generation on lower incomes are at risk of being priced out of the market.
For too many people, the dream of owning their own home remains unfulfilled. For many others the security of a safe and decent home to rent at an affordable price is despairingly remote.
There isn’t a simple solution for solving the UK’s housing crisis but building enough homes to meet demand – or bringing our existing housing stock back into circulation – is a very good place to start.
The urgency of this can’t be underplayed and it bears repeating. Four out of five renters who want to own their own home don’t have sufficient savings for a deposit in their area and three quarters don’t feel they could afford the cost.
New data shows the average home now costs 8.7 times the average local wage – the highest ratio since records began.
The maddening thing is that whilst the speed of building new properties continues to fall, the UK is not utilising its existing housing stock.
Over half of all owned homes are now under-occupied, whilst the number of homes across the UK which are standing empty – currently over 650,000 – shows no real signs of reducing.
But rather than getting more of these properties back into circulation, research by national campaigning charity, Action on Empty Homes, showed that in 2021 the number of long-term empty homes in England (those properties which have been empty for over six months) totalled 237,340 – well above the 2016 low point of 200,145. The number of long-term empty homes has risen by nearly a fifth since 2016.
So, what can be done to address the housing supply issues we face?
Build more new homes
Estimates vary, but according to research by the National Housing Federation and Shelter, there is currently a backlog of housing need of 4.5 million homes in the UK.
They calculate the country needs 340,000 homes a year over a period of 15 years, of which 145,000 need to be affordable.
However, to put this into perspective, the UK has not delivered 300,000 homes since 1977. Last year the rate slowed down and the country delivered fewer than its recent peak in 2019 at 243,000.
The reasons we continually fail as a country to build enough homes are broad and complex. Providing more homes cannot be done, for expediencies’ sake, at the expense of quality or the environment. The country needs a thoughtful, long-term strategy that pulls on the right levers so that we can deliver the homes we need. It won’t be solved by the uncertainty of stop-start reform and the revolving door of Government ministers tasked with the brief.
The new Prime Minister has now appointed her cabinet, and we now have the 18th Housing Minister in 18 years.
The country simply cannot take a long-term view of housing delivery if the leadership of that ministry is shown the door just as they have learnt the brief.
So, with the economy on the cusp of recession, we should be very clear that building homes is actually good for growth.
If the Government meets its manifesto pledge to build at least 300,000 new homes each year by the middle of the decade, this will generate over £14bn of economic activity and create 260,000 additional jobs.
That’s not to mention the real long-term benefits of providing decent and affordable housing that can and should be the cornerstone of any housing policy. According to Shelter around 1.5 million people are living in overcrowded homes, nearly half of whom are children. The human consequences of these statistics are profound.
Bring more existing homes back into use
Re-purposing and retrofitting our existing housing stock should be a key priority. Two statistics relating to our housing stock stand out for me:
Firstly; the UK has the oldest housing stock in Europe with around one in five homes failing to meet the Government’s definition of a ‘decent home’; and secondly in England there are over 650,000 homes lying empty.
Empty homes come in all shapes and sizes. They include derelict homes as well as homes that just need some slight renovation. But they also include new build flats which have been purposely left untenanted.
Some of these empty homes are in a very bad state of repair, but many of them are in a reasonable condition.
Some basic upgrades are, in a lot of cases, all that are required to get the house back into use. Recent estimates show that the average empty home only needs around £15,000 spending on it to make it habitable once again.
There is also a growing sense that these empty properties should provide some of the solutions to the housing shortage, providing affordable homes for first-time buyers and others.
After all, it’s far kinder to the environment to refurbish and repurpose old property, than to build new homes on green belt land.
Action on Empty Homes are calling for a new national strategy on empty homes along with the creation of a national fund to support councils in bringing tens of thousands of long-term empty homes back into use through a locally focused programme of grants and loans.
It has been very successful before and it could be one of the possible solutions to our housing supply crisis.
| Region | Number of empty properties (2021) |
| North East | 40,899 |
| North West | 100,493 |
| Yorkshire/Humber | 72,955 |
| East Midlands | 57,315 |
| West Midlands | 69,135 |
| East | 66,269 |
| London | 87,731 |
| South East | 96,219 |
| South West | 62,009 |
| England | 653,025 |
Looking at the figures for England, we can see that this is a national issue – with the largest number of empty homes being in the North West, followed closely by the South East.
The five-year trend is one of steadily rising numbers of long-term empty homes. Last year’s data is nearly 20% higher than it was in 2016. Nearly a third of the total number of empty homes have now been empty for over six months, and the figures show that in almost 100 local council areas, at least one home in every 50 is now out of use long-term. This cannot be right.
In summary
Addressing the supply of homes is not just about new-build, but it is also about looking at how we can make more use of our existing housing stock. It is also about making it easier for homeowners to buy and sell properties.
As things currently stand, the housing market does not function effectively – over half of all owned homes are now under-occupied.
Empty nesters are disincentivised from down-sizing, while stamp duty is a major barrier for families wishing to move up the housing ladder. The net result is a lack of typical first-time buyer homes available to buy.
Providing people with good housing really matters. The link between housing and outcomes in health and wellbeing are long established and backed up by medical evidence that shows that quality and tenure have a significant impact.
Homeowners are less likely to live in overcrowded or damp conditions, they move home less often and are more likely to feel they belong in their community. This is good for children growing up as it leads to better outcomes in health, education, and social mobility.
Sadly, for a generation of young families, unless something can be done with regards to increasing housing supply, they are now less likely than ever to own their own home.
Martese Carton is director of mortgage distribution at Leeds Building Society
