To the greatest extent in more than a generation, there is a cross-party consensus that Britain needs to build a lot more housing and tackle its crises of housing affordability, housing availability and homelessness. Policies and resources are being deployed to address this challenge, but current plans for housing supply (especially in England) appear strangely incomplete, with little clear commitment to the scale, form and nature of new housing provision which can be expected to address the needs of lower income and homeless households. This research is intended to provide an authoritative and evidence-based assessment of those housing supply requirements, set within a clear picture of the overall housing market, both current and prospective.

The headlines are certainly stark. There is a current backlog of households with housing need of 4million households in England or 4.7million across Great Britain.

We cannot meet all of these needs instantaneously and it will take time to build up a really effective housebuilding programme to address these existing needs plus expected future needs and demands. Fifteen years is a reasonable time frame to plan for such a programme.

Over that time horizon, the total level of new housebuilding required is estimated at around 340,000 per year for England (380,000 for GB). We estimate that the level of new social housebuilding required is 85-90,000 per year (GB 95-100,000), with additional provision of 25,000 shared ownership (or equivalent low cost home ownership) and 30,000 for intermediate affordable rent (GB 28,000 and 33,000).

There have been previous estimates of housing needs or requirements for the different countries of the UK, but this new study is showing higher numbers than some of these studies. That is partly just because policy has drifted or flailed around without clear and effective focus while things have got worse. But it is also partly because traditional approaches to assessing housing requirements have their limitations, which this new study seeks to overcome.

The traditional approach, exemplified by work such as Holmans (1995, 2001) or McDonald & Whitehead (2015), places too much uncritical reliance (in my view) on official household projections, does not give enough attention to affordability, and does not take account of the dynamics of the housing market.

These new estimates are derived from applying and comparing two distinct methodologies: one (‘static’ model) based on a traditional demographic framework, but enhanced to reflect affordability at different levels in the market and also the clear evidence of suppressed household formation; and the other based on a dynamic sub-regional housing market model, which enables consideration of a wide range of key outcome measures, relating to affordability, poverty, housing need and homelessness.

Building a lot more housing does create a virtuous circle of easier affordability, reducing housing need and enabling more households to get decent housing with more choice about location, type and tenure. Thus, we may not need to build as much social housing as the static model suggests. But, on the other hand, building a lot more housing does allow a lot more households to form who would not otherwise be able to, and they tend to be on moderate or low incomes. The way these factors work out will vary regionally depending on the starting position.

It is very clear that this increase should be skewed towards regions where the pressures are greatest, which is currently London and the South, although the exact optimal balance between within-London, near-to-London and the ‘Greater South East’ is an issue for more careful consideration. I personally do not favour rigid protection of Green Belts and other greenfield land if that means ever more intensive high rise redevelopment within London, when we could build good quality, liveable, sustainable medium density new settlements and urban extensions in the ‘Greater South East’.

Building on previous related research for Crisis, it is recognised that, to reduce ‘core homelessness’ substantially, additional measures both within housing policy (e.g. full application of prevention measures, Housing First) and beyond housing policy (limiting or possibly reversing some welfare reforms/cuts, particularly in relation to the Local Housing Allowance freeze; crime prevention and reduction) are needed. Meeting the goals of strategies to reduce and potentially end core homelessness are challenging, and there is currently not enough social housing to meet requirements associated with this in most of England. Under the recommended strategies this would become feasible by the mid 2020s.

The analysis explores potential upper limits to overall and social housing supply, including outcome indicators around ‘reasonable’ standards of supply relative to need and around the dangers of exacerbating ‘low demand’ problems. However, the analysis so far has not factored in feasibility constraints relating to land availability, affordable housing contributions or other resource issues. It also needs to consider the sensitivity of results to a wider range of assumptions about future conditions, including national and regional economic growth and population changes. These will be a particular focus in the next phase of the research, which will take the analysis down to local authority level.

We have examined the particular situation of and targets for Wales and Scotland specifically, as well as the broad regional pattern across England. In sum, our findings suggest that England requires more ambitious targets across the board, that Wales would benefit from more investment in affordable housing and its recently enhanced targets are not unreasonable. For Scotland, we have some more nuanced findings, suggesting that care should be exercised about the total housing volume target in view of issues of low demand and housing surplus in some areas, and that the balance of the affordable supply programme should probably be shifted somewhat from social renting to intermediate tenures.

It appears that some outcome targets are difficult to shift at all, most obviously the tenure target of increasing the share home ownership, overall or more particularly for the younger generation. However, the absolute number of home owners is still expected to rise, and good provision of appropriate shared ownership schemes can push this up further.

This article was originally posted on the I-SPHERE website.