Government and all expert commentators agree: the UK is not building enough homes. Despite efforts to increase housebuilding we build 100,000 fewer homes per year than we need.

The consequences of our failure to build have been well documented: house prices have grown1, private rents have increased2, homelessness has risen3 and the housing benefit bill has ballooned4. However, our failure to build is not a new phenomenon. As the Government's live tables on house building show, there has been a long-term steep decline in house building in England across all tenures.

Local government shares the collective national ambition to build one million new homes, which will only be achieved with strong national and local leadership working together. The final report from the LGA's Housing Commission engaged over 100 partners, and makes over 30 recommendations for how local and national government can work together to build more of the right homes in the right places. 

Construction worker

Why do we need to build?

To meet current and future housing need we need to significantly increase the supply of new homes. Most experts believe that we need to build 250,000 new homes per year5, whilst over the last decade we have averaged just 130,500 per year.

New housing development is important to health of the UK economy. Quite apart from the social benefits that accrue from a well housed population, the house building industry contributes £19.2bn a year to the UK economy, supports 600,000 jobs and has a predominantly domestic supply chain6.

To build the homes we need, local authorities are collaborating with central Government on a local government land ambition, working with their partners to release land with the capacity for at least 160,000 homes and helping to support the Government's policy on estates regeneration.

Why has England failed to build? 

There are a number of reasons why we have failed to build the homes we need, amongst the most significant are: the withdrawal of the public sector as a provider, the workings of the land market and England's shrinking construction sector.

It's easy to blame planning for not delivering the number of homes we need – but in reality these complaints duck the big issue. Research by the LGA shows that there has been an 11% increase in residential planning applications compared to a year ago and a record 475,647 homes in England have been granted planning permission but have yet to be built. See our policy paper on planning and growth to find out more.

The withdrawal of the public sector

Between the late 1940s and 1950s councils built more homes than the private sector and until the late 1970s local authorities were building 100,000 homes a year. But following a suite of policy measures introduced in the late 1970's-1980's, housebuilding by local authorities fell. Since this time, neither the private sector nor housing associations have been able to compensate for the reduction in local authority led housebuilding7.

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The workings of the land market 

Though less than 10% of land in England has been developed, and only 1.1% developed for homes themselves, the availability of developable land remains a key barrier to house building.

A significant proportion of our total land is highly protected: over a third is statutorily protected as National Parks, Areas of Outstanding Natural Beauty and green belt8. This means that readily developable land is a scarce and expensive resource. 

For example, once agricultural land has been granted residential planning permission its value significantly increases. According to the Lyons Housing Review, a piece of agricultural land worth around £20,000 per hectare could be worth as much as £1.2 million per hectare for residential uses in Birmingham, or as much as £4 million in Oxford and outer London9 

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England's shrinking construction sector 

The construction sector, particularly housebuilding, has fared badly during every recession since the huge growth of small housebuilding firms in the inter-war period. The 2007-08 recession, brought building levels to their lowest since the 1920's and lead to the loss of 250,000 jobs11. As a result, housebuilding is now concentrated in fewer hands and there has been a significant hollowing out of the construction workforce12. According to the Chief Executive of the UK's biggest housebuilder, David Thomas of Barratt Developments, the shortage of skilled tradespeople is now "the number one challenge for housebuilders".13


How has government responded?

Central government:

  • Funding
  • Policy responses
  • Planning policy
  • Land
  • Direct delivery; in 2015 government committed to deliver 200,000 starter homes, offer 1.3 million tenants the Right to Buy and cut red tape to boost home building.

Local government:

  • Funding
  • Planning policy
  • Land
  • Direct delivery

One Public Estate:

  • Collaboration between central government, local government and wider public sector partners

References:

  1. www.ons.gov.uk
  2. www.ons.gov.uk/
  3. www.gov.uk
  4. www.ft.com/
  5. www.hbf.co.uk/
  6. www.gov.uk/
  7. Lyons Housing Review, 2014
  8. Lyons Housing Review, 2014
  9. www.shelter.org.uk
  10. webarchive.nationalarchives.gov.uk
  11. www.gov.uk 
  12. www.local.gov.uk
  13. www.theguardian.com
 

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