We need to talk about the main parties’ plans for housing construction, but before we get to that there is something important we need to discuss. Everything you thought you knew about the number of residential constructions in this country is wrong. Extremely wrong. And that has an influence, well, a lot when it comes to this topic.
I know this is probably the last thing you need to process with just a few weeks left until the election and a lot going on beyond that, but bear with me because this is quite important.
Let’s start with the conventional image that most of us have in our heads about house building in this country (in fact, in this case we are talking about England, since most of the main statistics – and political promises for house building – center in England). It comes courtesy of a dataset published quarterly by the Department of Levelling, Housing and Communities.
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This dataset shows us the number of houses built in England – whether they are started (when work starts on a house) or completed (when work is completed).
Now, it’s not like the government has someone with a clipboard going around the country writing down how many buildings are being built; instead, the department uses data on building warranties (you generally get a 10-year warranty with a new home). This all might seem like a lot of information, but, well, bear with me.
These numbers tell a pretty simple story. In the 1960s and 1970s, England was building lots and lots of houses – an annual average between 1969 and 1979 of around 260,000 – and in some years more than 300,000.
But then, in the following years, the numbers fell – and quickly. They have never come close to the highs of the 1960s. In the last decade, between 2013 and 2023, the average number of homes built was just 150,000 – much lower than the comparable period in the early 1970s.
Now, when you hear political parties talk about wanting to build 300,000 homes, you probably wonder (I always do) how they could achieve those numbers. But that’s what brings us to the main point here.
When you read this or that party manifesto about a target to build 300,000 homes in England, the parties are not talking about the figures you are probably thinking of – the ones that show house building at just 150,000 in the last decade . They are talking about another set of numbers.
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Because it turns out that there is an entirely separate dataset (from the same government department) that tries to measure house construction a little differently. This counts all the housing stock across the country – and when you know how many houses there are, you can measure the change from one year to the next.
And this is important for two important reasons. First, because in the 1960s and 1970s we were not only building a lot of new houses, but we were also demolishing a lot of old houses. There were huge favela demolition programs.
If you really wanted to compare our housing availability today to that then, you really should adjust for this. However, these conventional home construction numbers do not do so.
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The second reason the other set of data is important is that the insurance numbers the government typically uses to measure housing construction no longer cover most of the housing market. There is a huge gap.
All of this means that looking at the other set of data and how the total number of homes changes from year to year (net addition, as it’s technically called) gives a much better picture of what’s actually happening in the housing market.
And what is really happening is quite different from that conventional image. In fact, the number of houses built in recent years is not significantly lower than the comparable period in the 1970s. It is higher!
This truer picture shows an average of 207,000 homes being added to England’s housing supply in the last decade, compared to an average of 198,000 between 1970 and 1980. It shows that we are actually building more new homes today than we have been for some time. . .
You may or may not find this mind-blowing (I did when it was first explained to me by real estate economist Neal Hudson, but maybe that’s just me), but it’s certainly important. And these numbers are certainly more representative of what is really happening than those normally reported by journalists.
The other result of all this is that the house construction numbers that each party has in their manifestos look a little more feasible than when looking at the other flawed data set. Suddenly the difference between current housing construction and, say, Labor’s target of 300,000 homes is not 140,000, but 65,000.
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Still, the question remains whether these goals are achievable. Labor has provided little extra money for housing construction, committing instead to reform planning, which may well help, but may not reduce the disparity as quickly as they hope.
In fact, the only main party nationally that has committed to a specific increase in social housing construction, with specific amounts, is the Liberal Democrats, who have promised to spend £6.2 billion on 150,000 social homes.
One thing that certainly seems to be the case is that, with house prices high and immigration also at record levels, the UK will need considerably more homes in the coming years, notwithstanding the fact that the underlying picture is slightly less dire than than conventional statistics suggest. .
This story originally appeared on News.sky.com read the full story
