A recent analysis reveals that England faces significant challenges in housing affordability and quality compared to other developed nations.
The Home Builders Federation, representing developers in England and Wales, conducted a comprehensive examination of data from the OECD, EU, and the UK government. Their findings indicate:
- England’s severe housing shortage has made it the most challenging place among developed nations to secure a home, with the lowest available properties per capita among OECD nations.
- England has the highest proportion of inadequate housing in Europe, with 15 percent of existing homes failing to meet the Decent Homes Standard, surpassing countries like Hungary, Poland, and Lithuania in terms of substandard housing.
- The UK possesses one of the oldest housing stocks in the developed world, with just seven percent of homes built after 2001. This lags significantly behind countries like Spain, with 18.5 percent, and Portugal, with 16 percent, in terms of modern housing stock.
These findings shed light on the pressing challenges in England’s housing sector, including availability, quality, and the need for modernization.
Increasing homeownership has been a prominent political goal. However, HBF’s research indicates that achieving this is becoming more challenging as house prices outpace incomes.
Between 2004 and 2021, the UK’s homeownership rate declined from 71% to 65%. In contrast, France saw a nearly 10% increase, and the Netherlands experienced a 15% rise in homeownership during the same period.
Despite political commitments and pledges to boost homeownership, policy factors have hindered new home construction.
The UK is far from meeting the government’s target of 300,000 new homes annually by the mid-2020s. In 2021-22, only 233,000 new homes were completed, and delivery in the first half of 2023 dropped by 10%.
Analysis suggests that achieving a record-breaking rate of 320,000 homes per year, nearly 100,000 more than the current rate, would be necessary for England to provide homes for its population in line with the OECD’s benchmark for developed nations worldwide.
To match the housing levels per thousand inhabitants seen in smaller European nations, a substantial increase in housing delivery is necessary. England would need to construct 291,000 new homes annually until 2030 to reach Belgium’s housing standard and 390,000 homes per year to match Denmark.
The average property price in England and Wales stands at over eight times the average income, rendering them “exceptionally unaffordable places to live,” as per HBF’s description.
Even when compared to countries known for high housing costs, the UK’s situation appears unfavorable. Denmark, known for its pricey and competitive property market, saw a 12% increase in the house price-to-income ratio from 2004 to 2021. In contrast, England and Wales experienced a much steeper 37% growth in the same ratio over the same period.
To match the housing levels per thousand inhabitants seen in smaller European nations, a substantial increase in housing delivery is necessary. England would need to construct 291,000 new homes annually until 2030 to reach Belgium’s housing standard and 390,000 homes per year to match Denmark.
The average property price in England and Wales stands at over eight times the average income, rendering them “exceptionally unaffordable places to live,” as per HBF’s description.
Even when compared to countries known for high housing costs, the UK’s situation appears unfavorable. Denmark, known for its pricey and competitive property market, saw a 12% increase in the house price-to-income ratio from 2004 to 2021. In contrast, England and Wales experienced a much steeper 37% growth in the same ratio over the same period.
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