Britain’s housing troubles

England is “the most difficult place to find a home in the developed world” is the damning conclusion offered up by the Home Builders Federation in its new report out today.

Analysis from the representative body of the home building industry in England and Wales, conducted using data from the OECD, the European Union and the UK Government, indicates England has fallen behind its international peers when it comes to availability, condition and affordability of housing. 

England has the lowest rate of available properties compared to its population of all OECD members and the UK has some of the oldest housing stock in the developed world with only 7 per cent of British homes built after 2001, far less than other countries like Spain and Portugal, with 18.5 per cent and 16 per cent respectively. 

As for cost, the average price of a property in England and Wales is more than eight times the average salary. According to the HBF, almost one in five people in Britain – 11.3 million – spend more than 40 per cent of their disposable income on housing, compared with just 9 per cent in France and 5 per cent in Germany. 

These concerning figures chime with other research out today by Rightmove which stress that worsening housing pressures in England aren’t exclusive to the capital: the average advertised rent for a new let outside of London has risen to a record £1,278 per month.

As Ian Stewart wrote previously in Reaction, average asking rents are rising far faster than earnings – by 9.3 per cent in the last year and by 33% since the pandemic. It’s hardly surprising then that the Resolution Foundation estimates that 6 in 10 working-age adults who rent are struggling to meet their housing costs.

Rents are largely soaring thanks to the growing mismatch between supply and demand. 

Today’s Rightmove figures reveal the intensity of competition in the sector. The average number of tenants requesting to see a rental property in Britain has increased form 20 to 25 in five months, up from 6 in 2019. 

According to Stewart, the reduction is rental supply is largely because buy-to-let has become a less attractive investment thanks to rising mortgage rates. While there has been no mass exodus of landlords, “the rapid growth in the stock of buy-to-let property which was seen since 2000 is over.” Meanwhile, demand is only increasing. 

The fact that tenants are seeing such a huge portion of their income eaten up by rent does, of course, only add to the difficulty to save up to buy a house. 

All of the data point once again to the fact that housing in Britain is in crisis – and that increasing the supply of affordable homes is an urgent priority for government. Yet strikingly, there was no mention at all of housing in Sunak’s speech in Manchester yesterday. 

Starmer would be wise to address this when he takes to the stage in Liverpool next week. According to the Home Builders Federation, over 40 per cent of the public say housing will be an important factor in determining who they vote for at the next general election.

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