England Can No Longer Provide A Home For Every Family
A NEW report reveals England is no longer able to house its own population.
Whilst in 1981 there were four per cent more dwellings than households, by 2000 this surplus had fallen to 0.2 per cent. With this trend continuing to worsen, nationwide stocks have now fallen below the number of households.
In London and the South East, this is already a reality. By 2000 there were 4.2 per cent fewer homes than households in London and 1.4 per cent fewer homes than households in the South East.
A steady but rapid decline in new housing completions has resulted in the lowest number of new homes being completed for 77 years. Britain last year built just 162,000 homes whilst household growth over the same period was 220,000.
Furthermore, 7.6 per cent of the nation’s housing stock was classified as unfit in 1996, widening the gap between the number of homes available and those in need of housing.
For a number of decades, Britain’s investment in housing as a percentage of its GDP (3.3%) has been the lowest of any major industrialalised nation. As a result, Britain’s housing stock is the second oldest in the EU.
Pierre Williams, spokesman for the House Builders Federation, said: “These figures now prove that Britain no longer has enough housing to provide every family with a home. Is it any wonder that house prices have spiralled when as a nation we seem unwilling to provide ourselves with something as fundamental as a roof over our heads?”
“The stark reality is that a 30-year campaign by the anti-housebuilding lobby coupled with a collapse of public investment in housing has resulted in a society unable to house itself. Far from `concreting over the countryside`, urban expansion takes up just one per cent of England`s land area every 50 years.
“We constantly hear of the problems created by this property shortage - first time buyers and key workers unable to get a foot on the housing ladder, a growing north/south divide, the increasing risk of a boom and bust cycle in the market driven by those having to over-stretch their finances simply to get a home of their own, an increasing number of families being put up in bed and breakfast accommodation and over-crowding.”
Although the Government has promised the “biggest reform of the planning system for 50 years” in the form of the Planning Green Paper, no firm measures are being proposed to tackle the crisis.
The Planning Green Paper suggests nothing more than targets but many local planning authorities have already made it clear that they have no intention of providing the housing needed. Without proper enforcement measures in place to ensure sufficient homes are built where they are needed, these targets will not be achieved.
“The Government has a key objective of ‘giving everyone the opportunity of a decent home’ but this is being destroyed by opposition at local level. Effective reform of the planning system offers a one-off chance to tackle nimbyism for the benefit of the whole nation. It must not be missed or the economic and social consequences will be severe."
The Planning Green Paper includes proposals for a land development tax - a system of tariffs imposed by local authorities on developers in exchange for planning permission. If implemented, this will almost certainly further reduce housing completions as developers turn away from projects that are rendered financially unviable as a result. This is turn will widen the imbalance between supply and demand putting further upward pressure on prices.
Under-supply and its consequences on house price inflation has produced significantly increased tax receipts for Government. Since Labour came to power, Stamp Duty receipts from residential property transactions have increased from an estimated £675 million to £2.2 billion per annum.
In addition, government tax receipts from inheritance tax has soared since Labour came to power. Since 1997 receipts have jumped by 54 per cent to £2.4 billion per annum - almost exclusively from rising property prices.
Williams added: "It is worrying that the Government is achieving substantially incresed tax revenues both in Stamp Duty and Inheritance Tax due to the continuing failure of one of its key objectives."
Ends
Housing Fact Sheet:
Population, Households and Dwellings:
· The UK population grew by 0.25% per year (145,700 pa) from 1981-91 and 0.37% per year (215,800 pa) from 1991-2000.
· The number of households in Great Britain grew by 1.0% per year from 1981-91 (220,000 pa) and 0.9% (220,400) from 1991-2000
· The proportion of Britain’s population living in urban areas (90%) is the second highest in Europe and the sixth highest worldwide (excluding several city and small island states)
· To accommodate expected household growth, it has been estimated that the urban area of England will increase from 10.6% in 1991 to 11.9% by 2016. Consequently, urban expansion takes 0.05% of England’s land area each year, or 1% every 50 years. Typically, housing accounts for 70% of land in urban areas.
Land, Planning and New Homes
· Housing completions in Great Britain in 2001 (162,000) fell to their lowest for 54 years. Excluding the war years and their immediate aftermath (1940-7) completions were at their lowest since 1924
· The UK housing stock expanded by between 0.7% and 0.8% per year over the last decade. At current demolition rates, new homes built today will have to last 1,400 years before it is their turn for demolition.
· From 1985-98, the UK invested a smaller proportion of GDP in housing (3.3%) that any other major industrialised nation - a record the UK has held for decades.
APPENDIX: SOURCES & NOTES
Full Report: Building a Crisis: Housing Under-Supply in England.
Wherever possible, the latest data have been quoted. Statistics are not always available for the United Kingdom, so in some cases data for England have had to be used.
Population Growth and International Migration (UK):
Population Trends, 106. Winter 2001
Households:
DETR Projections of Households in England to 2021; 1996-based estimates of the numbers of households for regions. October 1999
DTLR Mid year Household Estimates for England for 2000. Housing Statistics Summary No.11, 2001
Scottish Executive 1998-Based Household Projections for Scotland. Scottish Executive Statistical Bulletin Housing Series: HSG/2000/4
Scottish Executive Statistical Bulletin: Housing Series. HSG/2001/4
National Statistics Mid Year Household Estimates for Wales for 2000. Statistical Bulletin SB 38/2001
Housing Stock:
Housing Statistics 2001. DTLR
Vacancies:
DTLR web site. Housing Statistics Postcard, January 2002
Unfitness:
DETR English House Condition Survey, 1996
Long-term research into household and housing stock growth:
Holmans, Alan Housing Demand and Need in England 1991-2011. Joseph Rowntree Foundation, no date (approx. 1995). (See especially page 11)
Urban Areas - international comparisons:
United Nations World Urbanization Prospects: the 1999 revisions. UN web site.
Urban Areas & Forecasts:
Bibby, Peter and John Shepherd Urbanization in England: Projections 1991-2016. A report prepared for the Department of the Environment. HMSO, 1995 (The research used the 1992-based household projections and was prepared well before the Government set out its higher density requirements for new homes in PPG3 in March 2000.)
Areas of Green Belt, AONB, National Parks:
Regional Trends 36, 2001. Table 11.13. Statistics refer to areas in 2000.
Tenure
DTLR Housing Statistics 2001.
Tenure - international comparisons:
It is difficult obtaining consistent, up-to-date international tenure data. Owner-occupation rates have been drawn from a variety of sources.
Housing Stock Age
European Commission Housing Statistics in the European Union, 1998
Internal Migration:
On the Move; the housing consequences of migration. Edited by Richard Bate, Richard Best and Alan Holmans. Joseph Rowntree Foundation, 2000
House Building & Additions to the Stock:
DTLR Housing Statistics 2001
Responsiveness of Housing Supply to Demand - international comparisons:
Meen, Geoff Ten Propositions in UK Housing Macroeconomics. Urban Studies, Vol 33, No 3, 1996
Planning Permissions:
DTLR quarterly press release. Statistics of Planning Applications
Local & Unitary Plan Preparation:
Quoted in DTLR Planning: delivering a fundamental change. 2001
Average Housing Density:
Housing Statistics 2001
Use of Land, Brownfield Share, Greenbelt Land Use:
DTLR Land Use Change in England, No. 16. July 2001
Housing Share of GDP, Investment, etc:
Stewart, John Housing and the Economy. Council of Mortgage Lenders, 1997 (based on detailed GDP data for 1995).
United Kingdom National Accounts. The Blue Book, 2001. National Statistics web site. Private new dwelling contribution to GDP obtained direct from Office for National Statistics.
National Association of Home Builders (US). Housing; the Key to Economic Recovery. January 2002
National & Household Wealth
United Kingdom National Accounts. The Blue Book, 2001.
Housing Investment - international comparisons
Wilcox, Steve Housing Finance Review, 2001/02. Joseph Rowntree Foundation, 2001
European Commission Housing Statistics in the European Union, 1998
Housing Output Share of Construction:
DTI quarterly construction output statistics.
House Building Employment & Housing Employment Multiplier:
No official statistics for employment in house building are available. The employment estimates are from a study for the House Builders Federation published in October 2001. The multiplier estimates were made by Cambridge Econometrics and published in Housing Market Report, May 1995.
House Building Companies:
NHBC New House Building Statistics (quarterly bulletin)
House Building Industry Competitiveness:
Maxwell Stamp plc A Structure Conduct and Performance Assessment of the UK Housebuilding Industry. Prepared for the DETR. October 1999