Housing shortage

Housing shortage: are new homes being delivered in the right places?

New data shows that we are closer to meeting the Government’s target of delivering one million new homes by 2020. But we still need to deliver more in the right places if we are to tackle the housing crisis effectively. London and its immediate surrounds are amongst the areas where the housing need is greatest.

Figures from the Department for Communities and Local Government show that new housing supply rose to 189,650 in the last financial year, up 11 per cent on 2014-2015.

The spread of this new housing supply is patchy. Cherwell, Dartford and Tower Hamlets in east London, have the highest levels of additional homes.

Beyond that, some of the biggest numbers emerged well outside the M25 and London’s Green Belt in Buckinghamshire, Bedfordshire, Oxfordshire, Northamptonshire, Cambridgeshire and Norfolk. These are high demand areas, in some of which we expect to see the highest growth in house prices over the next five years.

However, it is disappointing to see such low increases in the areas hugging the M25, particularly to the west of London where there is so much demand. The map below highlights that there is a belt around the capital were the new homes delivered were less than 0.75 per cent of existing homes.

To make a real impact on housing need, these areas ought to be delivering at least a 1 per cent increase on exiting stock. In other words, they ought to be the darker shades of red.


New build homes make up 86 per cent of that total. However, change of use from commercial to residential, including permitted development rights where full planning permission is not required, delivers a substantial contribution of 30,600 to the housing numbers after a 50 per cent increase on the previous year.

Our estimates suggest that we really need to be supplying 300,000 new homes a year to cover a backlog of need after years of under supply. The challenge now is sustaining this level of delivery without being sidetracked by Brexit or the American election results. Building more homes not just for ownership but for a range of tenures, and delivering by a greater variety of house builder, would help.

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