Analysts Believe That Serious Housing Shortage In UK Cannot Be Met

 

An analysis of official government projections reveal that by 2025 England will have to confront a lack of 750, 000 homes.

The report suggests that the gap between supply and demand of housing could be the equivalent of the demand made by the populations of Liverpool, Newcastle and Birmingham collectively.

An autonomous think tank, the Institute of Public Policy Research made the analysis, suggesting that demand for housing reacts to three different economic scenarios and projects, with even a declining economy offering up demand for over 200, 000 more homes each year.

In the best case the economy will still require an excess of 280, 000 extra homes per annum. However, at the rate that housing is currently being supplied, as of the last twenty years remaining around 160, 000 new homes per year, the gap between the number of available homes compared with the number of households will range from 255, 000 and 1.2 million by 2025.

The analysis shows, according to the government’s projections for household growth, that by 2025 England will be short of 750, 000 homes, and will not be able to fulfil demand.

The areas that will be hit by the lack of supply to fulfil demand will include the South East, London, the East of England, as well as Yorkshire and Humberside. Demand is projected to be much higher in these areas than the additions that have been made to housing stock in the last few years. London will be short of 325, 000 homes, whilst Yorkshire and Humberside will need to fill a gap of 151, 000 homes. The East of England is facing a housing gap of 132, 000, with the South East being short of homes by numbers upwards of 77, 000.

The only area that will be able to meet demand will be the North West, as they are currently operating with 40, 000 more homes than are currently required, with many properties standing unoccupied.

The report illustrates that particular pressure will be on the social housing sector, regardless of the economy’s future performance. Up to 1.2 million households are set to be priced out of the private sector if the economy performs badly, requiring greater numbers of social housing. Even if the economy performs well, numbers requiring social housing are still projected to rise by 550, 000 by 2025.Without constructing a new housing policy demand will not be met.

Currently, around 4.5 million people are waiting to be allocated social housing. The previous year’s Spending Review outlined a cut to the housing budget over the next four years from £8.4 billion to £4.4 billion.

The Institute of Public Policy Research’s director, Nick Pearce said ‘We can’t go on as we have done. Britain needs to build more homes. That’s not going to happen without a fundamental review of housing policy. This new analysis shows the serious scale of the problem,’

He continued, ‘If the rate of house building doesn’t radically increase, we face a growing housing crisis. Whether the economy performs well or poorly, a serious gap looms between housing supply and demand. Our ageing population and rising expectations for living standards are going to drive up demand but if there’s no change in housing policy it will seriously hold back supply.



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