House-building to hit lowest levels since 1923 as housing waiting lists hit record high

The number of new homes built in England and Wales in 2009/10 will slump to its lowest level since 1923 – fuelling fears that a chronic shortage of housing will leave millions of people trapped in overcrowded and substandard housing for a generation to come, warns the Federation.

The National Housing Federation has forecast that house-builders are on course to build just 122,700 homes between April 2009-March 2010, 18,000 fewer than were built over the previous financial year, as a result of private developers scaling back developments following the onset of the recession.

The house-building figures for 2009/10 will be the lowest total since 1923/4, when just 86,000 homes were built, if the war years are excluded. It will be the second successive year that numbers have fallen significantly, after 2008/9 saw only 140,950 homes built, compared to 176,660 the year before.

The building of homes this year has been propped up by housing associations, who are set to build over 45,000 homes in England by April this year – with the aid of record levels of public investment and more flexible government grants via the Home and Communities Agency. This will be the highest total achieved by the affordable housing sector for a decade.

A record 4.5 million people in England are stuck on housing waiting lists and rising unemployment and repossessions has further fuelled demand for affordable housing during the economic downturn.

But supply has failed to keep pace with demand and the prospects of getting an affordable home are looking bleaker than ever for millions of Britons.

Since the mid-1960s there has been a long-term downward trend in the number of new homes built. In 1964/5, 387,000 homes were built, and in 1965/6 347,000 were constructed. The last time more than 200,000 were delivered was 1988/89, when 214,000 homes were built.

Amazingly, the number of new homes expected this year was exceeded eight times during the nineteenth century, with 135,000 new homes being delivered as far back as 1875/6.

Given the scale of the country’s housing crisis, the Federation has called on the three major political parties to go into the forthcoming general election with a pledge to ring-fence spending on housing – in the same way that ministers have pledged to protect investment in health, education and policing.

The Federation says that unless spending on housing is ring-fenced, the consequences will be dire for millions of families stuck on housing waiting lists.

Assessing the Pre-Budget Report, the Institute of Fiscal Studies said that cuts of 17.98% would have to be made to all government departmental budgets if current levels of investment are maintained in health, education and policing.

An 17.98% cut to the housing budget would see the completion of only half the 1m affordable homes the Government had planned to build by 2020, adding an extra 1.25m people to housing waiting lists.

Over 2.3m people are currently living in overcrowded housing in England, and that number is expected to increase rapidly over the next five years due to the chronic shortage of affordable homes. Overcrowding is linked to poor health, family breakdown and can have a damaging impact on children’s education.

Federation chief executive David Orr said: “The number of new homes built during 2009/10 is set to hit an 87-year low, plunging the country into the worst housing crisis for generations.

“The delivery of new homes this year has been propped up by housing associations, who have built just under half the total number – with the aid of record levels of public investment and more flexible government grants via the Home and Communities Agency.”

He added: “With record housing waiting lists and overcrowding reaching epidemic proportions in many places across the country, the need for more affordable housing has never been greater.

“The three main political parties must demonstrate their commitment to helping the millions of Britons in desperate need of an affordable home by pledging to safeguard investment in housing – and giving it the same priority as health, education and policing."

Commenting on the report, Liberal Democrat Shadow Housing Minister, Sarah Teather said: "This is the legacy of decades of underinvestment and neglect by consecutive Tory and Labour Governments which today means people who have been hardest hit by the recession are struggling most to access affordable housing.

"The housing shortage is one of the biggest crises facing Britain today and tackling it must be a priority of any future government. That is why Liberal Democrats would bring hundreds of thousands of empty homes back into use, as well as empower local councils to borrow against their assets and finance necessary investment in housing in their area."

Shadow Minister for Housing, Grant Shapps said: "After 13 years of Labour government and nine different housing ministers this country will see fewer homes built than at any time since 1923. For families languishing on Labour's record housing waiting lists and for everyone struggling to buy a home this is more than just another failed Labour statistic. We need a new way to get this country building which is why Conservatives will scrap Labour's useless top-down housing targets and instead work with communities to create the homes that this country so desperately needs."