A recent exploration by LandlordBuyer has unearthed a 41% boost in the construction of new homes across the UK over the previous ten years, in the face of ongoing challenges with housing overcrowding that plague local government bodies.
The exploration indicates that from January through September 2023, the UK saw the erection of 138,570 new residential units. This figure shows a significant 41% boost over the homes constructed in the same timeframe ten years earlier, where 98,080 homes were built from January to September 2013.
However, even with this considerable increase, the problem of overcrowded living conditions remains, affecting over 1.1 million households in England and Wales, which makes up 4% of all households.
The predicament of overcrowding is particularly acute in cities such as Birmingham, London, and Leicester, with a higher incidence among households in private rentals (7% of households) and social housing (9% of households), compared to those owned outright (2% of households).
Jason Harris-Cohen, Managing Director at LandlordBuyer, remarked, “It’s absolutely essential that we build more new homes, and it’s great to see an uplift in supply over the last decade. While this is positive, we need to look at how the figures break down to establish why we still have a serious issue of overcrowding.”
He further observed, “While 153,300 new build homes were started in 2023, only 138,570 were actually completed/built. That means almost 15,000 new homes never made it over the line in the year construction started.”
Harris-Cohen cited the shortage of labour and the escalation in the cost of building materials as significant barriers to the completion of many new housing projects, urging local government bodies to offer more backing to developers.
He also questioned the allocation of new homes, stating, “The allocation of new homes also needs scrutiny. Overcrowding is most prevalent in the social housing sector but housing associations and local authorities only gained 32,290 new homes in 2023. Conversely, the private sector gained 106,280 new homes – an out-of-kilter proportion given owner-occupiers were the least likely to suffer overcrowding.”
Harris-Cohen pointed out that private landlords could be instrumental in mitigating overcrowding issues.
He expanded on this, saying, “New builds are an attractive proposition as they are low maintenance and energy efficient but they have always attracted a price premium. Furthermore, landlords have tended to favour apartments in city centre locations – the locations identified where overcrowding is at its worst. When figures show 7% of private renting households suffer from overcrowding, more houses to rent, rather than a saturation of flats, may help address the issue.”
He wrapped up by suggesting that developers could better encourage private landlords to invest in family homes through various incentives, “It does fall on housebuilders, however, to incentivise private landlords in the same way they do owner-occupiers. Legal fees paid, a stamp duty contribution and a furniture pack attached to family homes would help property investors reassess what they purchase and where.”
