Need for 200,000 homes a year 'may well be bunkum', says report

Published by Julien Tremblin for 24dash.com in Housing and also in Central Government, Local Government

Claims that Britain needs to build up to 240,000 homes every year appears to be “bunkum” as its housing stock has grown significantly in the past two decades, a new report reveals.

The research by financial advisory Collins Stewart shows that the UK’s housing stock has been rising at double the rate of population growth for 20 years.

Politicians and house builders have repeatedly claimed the country needs to build more than 200,000 homes a year to cope with the rise in population.

“We believe the projection may well be bunkum,” the Home Construction report says.

It reveals that every year - except for the post-recession period in 2010 – the country’s housing stock has gone up faster than population growth. Last year, there were 2.28 people for each home in the country, compared to 2.44 in 1991.

In fact, according to the report, the UK has been building more homes than thought. On average, 11,000 “hidden homes” are built every year that are not officially recorded but picked up by tax authorities.

The report states: “The phrase ‘Britain is only building half the 240,000 homes needed each year’ has been repeated so regularly by CEOs, analysts, journalists and politicians that it is now rarely caveated with any suggestion this is an estimate.”

The report says the claims of a “structural under-supply” of housing which has driven government policy - and house builder valuations - appear “flimsy”.

However, despite healthy construction figures, the research does warn of a potential “lost decade” for UK housing.

It states: “Housing could remain for years caught between weak consumer appetite for borrowing and banks’ aversion to mortgage lending, largely due to Euro-zone risks. We believe lending, transactions and prices could all fall this year.”

The research also recognises several areas where homes are in short supply especially in affordable housing, where “house builders have been loath to build any more than they have to under planning requirements”.

It also identifies a lack of family housing, particularly in London where houses were massively converted into flats in the 1980s.

The report also sees a growing need for “intermediate retirement accommodation” – for people who wish to downsize but not necessarily to a retirement home.