England’s 20 year housing stock squeeze has left 1.7 million families sharing in the private rented sector

Published on Housing, Wealth and Debt

England has just 825 homes for every 1,000 families, following 20 years of its housing stock not keeping pace with demographic change, according to new analysis published today (Saturday) by the Resolution Foundation.

The new findings categorically refute the argument that England does not have a housing shortage by showing that the ratio between housing stock and family units is at its lowest point since records began in 1991. In that year there were 845 homes for every 1,000 families, rising to 867 in 1998, before going on a 20-year fall. In 2016, England had just 825 homes for every 1,000 families. This fall, relative to the housing stock ratio in 1998, is equivalent to one million missing homes.

The research shows that this housing stock squeeze has seen major changes in how people live, with the number of families sharing a privately rented home in England trebling since 1991 (from 550,000 to 1.7million in 2018).

The Foundation says that the growth of sharing households – which includes young professionals living together, or non-dependent children living with their parents – is likely to have come about more out of necessity than choice. It notes that the increase in sharing, which is not factored into official estimates of the UK’s housing needs, is greatest in areas where housing cost pressures are most acute, such as London, the South East, Birmingham and Manchester.

The analysis shows that wider societal shifts have played a part in this housing stock squeeze. It notes, for example, that older people are much less likely to live with adult children or other families today than in the past. In 1991, 16 per cent of those aged 65 and over lived in a shared home. By 2016 this figure had fallen to 11 per cent, increasing the number of homes needed.

The Foundation notes that recent policy action to build more houses is helping to bottom out this decline. It shows that the ratio of housing stock to family units finally started rising last year for the first time this century.

However, if current building levels of 222,000 a year continue it will take until 2036 for the ratio of homes to families to return to its 1998 high point. This reinforces the need to meet government targets of increasing further the number of homes being built, says the Foundation. It adds that even if the government achieves its ambition of building 300,000 new units annually, it would still take a decade to recover to the high of the 1990s.

Lindsay Judge, Senior Research and Policy Analyst at the Resolution Foundation, said:

“The number of homes built in the UK has consistently failed to match the housing needs of families. England’s housing stock has been squeezed over the past 20 years, leading to huge changes in the way we live.

“The number of families sharing in the private rented sector has trebled since the 1990s, at the same time that adult children living with parents has also increased. This is likely to be more from necessity than choice. Independent living is simply unaffordable for many young families, particularly in cities where demand is high.

“Recent government action looks to have at least stopped the housing stock squeeze getting worse. But far more is needed to get to grips with this crisis. At current building rates, we’ll be waiting another 20 years before we’re back to where we were in the 1990s.”

Notes:

  • “Family” means a single adult or couple along with any dependent children. This is also known as a “benefit unit”. “Household”, as an ONS definition, refers to one person living along, or a group of people (not necessarily related) living at the same address who share cooking facilities and share a living room, sitting room or dining area. A household can consist of a single family or more than one family, as per the definition of family above.
  • Household figures are sometimes used to argue that we have abundant housing stock. Looking at household figures, in 2016 there were 1,045 homes for every 1,000 households. However, the definition of a household means that a household can only form when there is a building in which to do that. Instead, looking at the ratio between houses and estimates of families, the figure in 2016 drops to 825 homes for every 1,000 families.