One million missing homes

At current building rates, we will build one million fewer homes than we need every seven years. That’s on top of the current housing shortage. To a great extent, politicians know this. However government is not stepping up to face the scale of the challenge.

So we’ve produced a comprehensive analysis of the tough choices policy-makers now face, including the worst option of doing nothing. Below, Matt Griffith sets out our key findings – a radical yet achievable series of options for investment and reform.

Shelter’s latest policy report is Solutions for the Housing Shortage

For England to contain future housing pressure we should be building around 250,000 new homes every year. We are currently building under half this number. If building stays at current levels we will build a million fewer homes than we need every seven years. This is a monumental failure, and one that will increase the pressure on house prices and rents every year it goes on.

 Worryingly, this failure looks increasingly built in to current government plans.  Unless we do something markedly different, our housing market is guaranteeing young generations face even worse conditions than now. Realistic projections of private housebuilder growth mean that existing builders won’t be able to come to the rescue, while the spending plans set out in the Comprehensive Spending Review mean a year on year drop in affordable housing investment and delivery after 2015.

 But it doesn’t have to be this way. We have managed to build enough homes before, even in very tough economic conditions – from the depression of the 1930s, the huge government deficits of the immediate post World War II period and during the global economic shocks of the 1970s.  The current failure is as much one of imagination as anything else. A failure to imagine what this implies for people – families living in more cramped accommodation and spending even more income on housing costs. And a deeper failure to imagine how we could do things differently.

 Our new report sets out what “doing things differently” looks like. There are no easy answers here: we will have to spend real money, and we will have to reform the system to create new ways to build homes. But with the right package we can double output:

Public spending is inevitably constrained by the fiscal squeeze faced by government. But investment in housing makes good economic sense, either through switching money from other departments or borrowing more. The other option is to allow Local Authorities to invest more. Unlike much of Europe, our Councils are limited by a tight financial corset that doesn’t fit their ambitions or our needs.  

We also need to breath new life into who builds our homes. We need a much more dynamic range of actors than our development sector currently has, creating more choice and more competition. So we need to open up opportunities in the land market – for self builders, for small bespoke firms and new entrants.

And we need major new developments too, such as a new generation of Garden Cities. This means releasing more land for new homes and getting it into the hands of new players with the right powers and vision to deliver homes and places at scale. This is not an either/or choice: the size of the gap is so great we need all of the above.  

These options all involve hard choices and significant changes. Yet the worst option of all would be to do nothing. Inaction would be as much a choice as doing things differently – and one that would generate consequences far more painful than embracing reform.