England is heading towards a significant housing challenge, with new projections indicating that the number of households could increase by around 17% to reach 27.6 million by 2040. This steady rise is expected to place even greater pressure on an already stretched housing system, according to research from development consultancy Marrons.
The findings point to a widening gap between the number of homes needed and those being delivered. With demand already far exceeding supply in many areas, the outlook suggests that housing pressures are unlikely to ease without major intervention.
Rising Demand Across England
Household growth is expected across all regions, but some areas will experience stronger increases than others. The South West is projected to see the highest rise at around 20%, reflecting growing demand for homes in the region.
The East Midlands, East of England, Greater London and the South East are all forecast to see increases of approximately 18%, showing that demand will remain consistently high across much of the southern and central parts of the country.
The North East is expected to experience the slowest growth at around 14%, although this still represents a notable increase in housing demand over time.
These regional differences suggest that pressure on housing supply will not be evenly distributed, with some areas facing far more intense competition for available homes than others.
Supply Struggling to Keep Up
Alongside rising household numbers, there are growing concerns about whether housing supply can keep pace. Research highlights that more than 1.3 million households were already on local authority housing registers in 2025, showing the scale of unmet demand across the country.
At the same time, projections suggest that over 320,000 social homes could be lost by 2040 if current trends continue. This potential reduction in social housing stock adds further pressure to an already constrained system.
The imbalance between supply and demand is becoming more visible, particularly in the social and affordable housing sectors, where waiting lists continue to grow.
Changing Household Structure and Demographic Pressures
The challenge is not only about the number of households, but also about how those households are changing. Different age groups are expected to grow at different rates, creating varied demand across the housing market.
Households in the 25–44 age group, often associated with first-time buyers, are expected to increase by around 14% to reach 16.1 million. This group will continue to drive demand for starter homes and affordable housing options.
Younger households aged 19–24, including students and early-career professionals, are forecast to grow by 9% to around 710,800 households. This is likely to maintain pressure on rental markets, particularly in urban areas.
Meanwhile, households aged 65 and over are projected to increase significantly by 36%, reaching 9.4 million. This shift is expected to increase demand for later-living accommodation, retirement housing, and accessible homes.
Together, these changes highlight how housing needs are becoming more complex, with demand spreading across multiple types of housing rather than focusing on one segment.
Warning of a Structural Housing Mismatch
According to economics director Dan Usher of Marrons, England is moving towards a long-term mismatch between housing supply and demand. He noted that while household growth is occurring across all age groups, the delivery of new homes is not keeping pace, particularly in the affordable and social housing sectors.
He also pointed to rising housing waiting lists and the potential loss of social housing stock as key indicators of a system under sustained pressure. Without meaningful change, affordability is expected to worsen, making it increasingly difficult for many people to access suitable housing.
Policy Direction and Planning Challenges
The research also links these challenges to proposed updates in national planning policy, which aim to place greater emphasis on delivering homes that reflect real housing need. This includes ensuring that development decisions are supported by strong and up-to-date data.
However, experts argue that the issue goes beyond planning policy alone. The key concern is whether the homes being built match the way people live now, and how they will live in the future.
As household structures continue to evolve, the housing system will need to adapt more quickly to changing demand patterns.
Wider Data and Long-Term Outlook
The updated Housing 2040 report draws on the latest official projections and housing data to provide a detailed picture of England’s future housing needs. It combines demographic forecasts, local authority housing register figures, and long-term social housing trends to build a clearer understanding of supply and demand pressures.
This broader analysis suggests that the housing challenge is not short-term, but structural in nature. Regional differences, demographic change, and ongoing supply constraints all contribute to a more complex and long-term issue.
Conclusion
Overall, the projections suggest that England is facing a growing housing shortfall that will become more pronounced over the coming decades.
Without significant increases in housing delivery and a stronger focus on matching supply to real demand, the gap between the number of homes needed and those available is likely to widen further.
The result could be a housing system under sustained pressure, with affordability challenges affecting more households across all regions and age groups.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property