New Homes Built in UK

Statistics on the number of new homes built in the UK are produced by the ONS.

Since the credit crunch of 2008, the number of homes built has fallen well below the level necessary to meet expected rising demand.

New Homes Built in UK

Source: ONS

The number of new houses built in the UK in 2010/11 was only 106,000. compared to 168,000 in 2007/08. The majority of new houses are built by private enterprise.  Although in 2010/11 the number built by local authorities increased from 320 to 1,570. But, it remains a small % of overall homes built.

• Private enterprise completed 79,460 houses.
• Housing associations completed 22,660

It is estimated that the number of households in the UK is expected to grow by 200,000 to 250,000 over the next decade. The rise in the number of households is due to:

• Rising population
• Immigration
• Smaller size of households due to divorce increased preference for living alone
• Ageing population more single old people.

The Barker report into UK housing (2004) found that housing shortages were the main reason behind the long term real house price increases in the UK. In 2004, the report said, the UK has experienced a long-term upward trend in real house prices of 2.4 per cent per annum (real house prices  adjusted for inflation) over the last 30 years. (Historical house prices) The report suggested that:

• To bring the real price trend in line with the EU average of 1.1 per cent an extra 120,000 houses each year might be required.
• The shortage of housing supply is another factor behind the volatility in UK house prices. This house price volatility has significant macro-economic implications.
• Barker report (web archive)

Problems to Increasing Number of Homes in the UK

• Planning regulations. At the moment, local authorities have considerable say in whether to allow new homes to be built.
• Local Opposition. There is often significant local opposition to using ‘green belt land’ for the purpose of building new houses.
• On a macro level there is agreement on the need to build more houses, but at a local level there is usually opposition to building new houses.
• Delays in planning process. The government is considering streamlining the planning procedure to make it easier to gain planning permission.
• Reluctance to live and build high density high rise flats in city centres. The 1960s experiment with tower blocks is widely considered a failure. Many of these tower blocks are being demolished increasing need for new home builds.

The fact the Barker report was published in 2004 shows that government intentions to build new houses are much more difficult to turn into reality. Since the report, the number of homes built has actually fallen rather than increase. The long term implications of this housing supply are higher house prices,

• declining affordability
• More difficult for young people to get on the property ladder.
• Intergenerational inequality. People who own houses will see increase in wealth compared to those who rent.