Britain needs a million new homes

INVESTMENT PROPERTY NEWS: TIMESONLINE

Britain is facing a housing crisis with a potential shortfall of 1.4 million homes, according to experts.

A comprehensive analysis projects an increase of 3.5 million households by 2021, or 175,000 extra households per year, The Times has learnt.

Housing experts claim that house-building needs to increase by 33 per cent from the current 154,000 a year to 220,000 a year to meet the rising demand, or the country faces spiralling homelessness and overcrowding. If building levels remain as they are there will be a shortfall of 1.4 million homes in 15 years. About 160,000 houses were built in 1950, rising to 291,000 in 1970. But this fell gradually to 135,000 in 2000, increasing only last year to more than 150,000.

The predicted explosion in households is due mainly to more people remaining single, rising divorce rates and older people living on their own rather than in nursing homes. However, nearly a quarter of the new households are due to increases in immigration.

Gideon Amos, director of the Town and Country Planning Association, which publishes the findings next week, said that the housing “ticking timebomb” would prove as critical as the looming pension crisis unless ministers took urgent action. “The worrying implication of this report is the spectre of rising homelessness and social exclusion,” he said.

John Prescott, the Deputy Prime Minister, has proposed an extra 200,000 homes in the South East, but residents are resisting developments in most areas and are trying to block the proposals.

The study, at Cambridge University, shows that of the extra 175,000 households per year, almost 130,000 can be linked directly to the growth in the adult population. Factors include increased longevity (45,000-50,000), immigration (40,000), and the number of people reaching adulthood exceeding the number who die in adulthood — the baby-boom factor (40,000). A further 25,000 to 30,000 is due to rising divorce rates and separation, says the report.

The remaining 20,000 extra households a year are due to other social trends which have led to more people living on their own. The study shows, for example, that younger people are increasingly choosing to live alone, a trend that is expected to continue.

Mr Amos said the report debunked the myth that immigration was the main factor driving up housing demand. “On the contrary, evidence shows that upwards of 200,000 new homes per year are needed to address the existing backlog and meet future need, which is a third more than are being currently built,” he said. “Of this total, just 18 per cent is caused by immigration.” He argued that although the number of new immigrants made up 23 per cent of household units, some of these families lived together, so reducing the number of separate homes needed.

The report, by the Cambridge Centre for Housing and Planning Research, says that there are about 3.2 people per household among recent immigrants compared to 2.36 people in the average English household.

Yvette Cooper, the Housing Minister, admitted that in past 30 years there had been a 30 per cent increase in the number of households, but a 50 per cent reduction in the homes built. She agreed that more houses needed to be built. “People living longer and in separate households will mean we need to build more homes so the next generation do not lose out,” she said.

“Already we are seeing pressures on first-time buyers, homelessness and overcrowding because in the last 30 years we have not being building enough to meet demand. Too often, myth and misconceptions are used by people who want to block the new homes that we now need.”

- 22 September 2005