The recent BBC Briefing on Housing is a lengthy read, coming in at 186 pages, but its length serves to highlight how many issues need to be addressed when tackling the UK’s housing crisis. Two of the main issues flagged up in the Briefing are the affordability of housing and increasing delivering more dwellings. On the issue of affordability, the most recent data published by the Office for National Statistics (ONS) show that median house prices in England are now eight times the median gross annual salary, with this affordability ratio having almost doubled since 2000. To put this into perspective, the average mortgage is typically four times your annual salary.
In terms of delivering more homes that are affordable, just under 510,000 affordable dwellings were delivered in England between 2009/10 and 2018/19 according to data from the Ministry of Housing, Communities & Local Government (MHCLG). Over the same timeframe however, MHCLG data show there were around 166,000 social housing sales, which includes Right to Buy purchases. These homes are lost to the affordable housing supply. The number of ‘net’ affordable dwellings delivered over the last decade is therefore 344,000, or 34,000 per annum. Considering the estimated annual requirement for affordable is in the region of 100,000+, we are still a long way off meeting this target, regardless of whether you look at gross or net delivery.
Looking at overall delivery (i.e. not just affordable homes), there were 241,335 net additions to the dwelling stock in England in 2018/19. The data for this indicator go back to 2000/01 and the 2018/19 figure represents the highest rate of delivery over the period, which is an encouraging sign and suggests we are heading in the right direction in terms of meeting the annual requirement of 300,000 new homes by the mid-2020’s set out by the Government. To achieve this target, Councils are going to have to be realistic when setting housing targets for their areas. With the introduction of the standard method for calculating housing need, it is often the case that a local planning authority will simply go with the standard method calculation because it represents the figure which is likely to be most acceptable from a political perspective.
One of the major weaknesses of the standard method is that it identifies the minimum housing need in an area, rather than the actual housing requirement. It does not take account of the impact that growth strategies, infrastructure improvements etc. will have on an area and how these could lead to higher housing requirements, for example. Given that many Local Enterprise Partnerships and Combined Authorities are in the process of finalising their Local Industrial Strategies, which will focus on boosting growth and productivity, it is important that the impact of growth strategies such as this are factored into the housing requirement calculation. This may well result in higher housing requirements for many local authorities, but if we are to get anywhere near the 300,000 homes per annum target, and also deliver more affordable homes, then housing requirement targets are going to need to increase in many districts and boroughs. The Government is due to consult on revisions to the standard method in 2020 and it will be interesting to see how it balances political pressures against the genuine need to finally start delivering the number of homes required to support sustainable economic growth across the country.