Why do we have a housing crisis? Do we need 1.5m new homes? If so, where? How should they be built? Is this compatible with cutting our carbon emissions?
My heart sinks every time I see new houses on greenfield sites – often isolated large houses or new estates of detached houses packed together, with large driveways/garages and small gardens. These are far from schools, shops and workplaces, and create a two-car dependency as their population density is insufficient to support regular public transport.
The Labour party came to power with a promise to build 1.5 million new homes in the five-year lifetime of this Parliament, which is 300,000 new homes each year. Whilst new homes are built to moderately good energy efficiency standards, most still have a gas boiler and token solar panels on the roof – failing to maximise the opportunity of solar.
Do we have a housing crisis?
Yes, we do. Since 2000 the UK has had inflation of 87% but the average house price has risen by 252% to £282,000 and the average rent has increased even more, 280% to £16,000 per year. As a result, housing costs take up an increasing proportion of our incomes. In many places young professionals cannot afford to secure a mortgage unless assisted by their parents. Many adults in their 20’s remain or return to the family home, delaying their desired independence. Homelessness has increased too.
Housing statistics (2000-2024)
I’ve taken these from various google searches and cannot vouch for their accuracy. I’ve tried my best to amalgamate statistics for England, Scotland and Wales and sometimes from Northern Ireland.
- The UK population increased by 10 million, from 59 million to 69 million (17% increase).
- The number of households increased from 25 million to 28.7 million (15% increase).
- The average number of people per household hasn’t changed much at around 2.4, although if we look further back it was 3.5 in the 1950’s.
- The number of people living alone has increased from 6.8 to 8.4 million, an increase from 11.5% to 12.1% of the population, inhabiting 27% and 29% of homes respectively.
- Around 190,000 new homes were built each year, around 4.4 million in total. In 2021 54% were on brownfield and 46% were on greenfield sites.
- Annual migration was steady for most of this period at around 250,000 per year then leapt up in 2021, reaching a peak of 900,000 in 2023, then halving in 2024.
- Net migration to the UK has been around 6.8 million over this period so most of the population increase is due to immigration. In fact, the birth rate is now below the replacement rate to maintain a steady population.
Discussion
As the population increased by 10.2 million and there are 2.4 people per house, then we would have needed 4.2 million additional houses to maintain the status quo. Around 4.4 million new houses were built and around 6,000 homes demolished each year, giving a net increase of 4.25 million homes.
There is a puzzle here. The consensus is that we have a housing crisis because we haven’t built enough new homes, but these figures don’t support this. Perhaps we inherited a housing crisis in 2000 and have never recovered, but that doesn’t explain why house prices and rents have gone up so much.
Sorry, I don’t have an answer to this puzzle! The rapid increase in the number of students attending universities may be part of it, alongside the increase in short term rentals.
Future Needs
This depends on future population growth. Let’s assume it is 500,000 per year, which would require 208,000 new homes per year, less than the target of 300,000.
Other Solutions
Housing costs are driven by the balance between supply and demand. The politicians’ simple answer is to build new homes. Other initiatives, like the ‘help to buy’ scheme offer a subsidy to purchase houses which may push up the demand for and therefore price further.
What other options are there?
Well, you wouldn’t need to build any new houses in the next 5 years if the average number of people living in each house increased from 2.4 to 2.42. In India, the average household size is 4.4; or closer to home it is 2.5 in Spain.
Or you could increase supply:
- Convert vacant office and retail space to housing;
- Convert large houses into multiple tenure/ flats;
- Reduce the number of vacant houses (around 700,000 in England alone);
- Encourage extensions rather than purchasing a larger house;
- Restrict Airbnb/ Booking.com style short term rentals;
- Discourage second home ownership.
Or you could reduce demand:
- Encourage downsizing, particularly elderly people moving to smaller more suitable properties, thus freeing up larger family houses;
- Actions to decrease the number of people living alone through circumstances, not choice;
- Encourage multiple occupancy as a lifestyle choice (reduce loneliness, share bills).
Or you could change rules to decrease immigration, but I am not straying into that territory!
The Government can use planning regulations, tax, and subsidies to influence housing developers and our behaviour. For example, tax relief for renting out a room, Council Tax on second homes, short term lets legislation, and Stamp Duty Land Tax. Stamp Duty acts as a disincentive to people moving house, for example moving closer to their place of work or downsize to a smaller home. VAT at 20% is levied on renovations and extensions but not to new build homes. The government should reverse this to encourage regeneration.
What homes should we build?
I’d love to see a ban on new homes on greenfield sites, for every new and refurbished house to be built to net zero standards and for measures to encourage redevelopment and to restrict the demand for new homes. However, I am realistic enough to realise that this could cause hardship and push up housing prices in certain areas.
If we are to build new homes, then as far as possible these would be desirable features:
- Redevelop brownfield sites over greenfield;
- Redevelop vacant office and retail spaces to regenerate our city centres;
- Avoid urban and rural sprawl, encourage high density housing, and reduce the proportion of detached houses;
- Build homes that are accessible to services and public transport;
- Build desirable housing and environments that foster local community engagement;
- Ensure solar panels or green roofs cover every inch of roof space;
- Encourage the use of low carbon construction materials such as wood, and discourage the use of concrete;
- Require zero carbon heating and hot water;
- Require permeable driveways and EV chargers, or even better, developments where cars are not essential.
Conclusions
Construction is a carbon intensive activity, and it will become ever harder to meet our climate targets if we continue to build thousands of new homes. We should redevelop redundant or poor-quality homes to a better standard and create high quality urban environments that people want to live in. We should also build, or refurbish, more homes to be a suitable and desirable choice for our increasingly elderly population.
We should shift the housing debate beyond just building ever more new homes in the countryside. Can we revitalise city centres to be vibrant, attractive areas to live? Can we build more semi-communal living communities to provide people living alone with a wider range of options?
I’d be interested in your ideas. Please email me at This email address is being protected from spambots. You need JavaScript enabled to view it..
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Carbon Choices
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