300,000 houses – the generation of a myth (as opposed to the evidence!)

There is according to many commentators, government, the media, housing organisations and various think tanks, a need to build 300,000 houses each year. The BBC regularly quote the figure, invariably when housing is in the news. It’s a consensus, an article of faith, everyone agrees!

It’s a figure almost never questioned, accepted as Sajid Javid stated in relation to housing policy in 2017, lack of supply “It’s a simple statement of fact.” Yet despite being repeated ad infinitum, there is no evidence to support the figure. It appears to have emerged in October 2017 with a comment by Sajid Javid, since when it has taken over as the goal. Prior to that in February 2017, Sajid Javid quoted a figure of between 225,000 and 275,000.

According to supporters and commentators, as fewer houses have been built than the target figures, a lack of supply has resulted, and as a consequence we have seen high and increasing house prices, rising rents, sub-standard housing, homelessness, and fewer young people able to buy a property.

The problem with this approach is that is in essence – wrong!

Housing targets based on incorrect household projections

The housing targets have suffered from a fundamental flaw – the household projections upon which such targets are based have been incorrect. “High housing targets have been derived from various estimates of household growth. These have “repeatedly exaggerated official estimates of growth in the number of households in the UK." [Mulheirn, Is there *really* a housing shortage? 2017]. The 2008 projections from the Department for Communities and Local Government gave a figure of 280,000 extra households per year. Their 2014 forecast was for 235,000 per year, while the 2016 figure was 260,000 per year.

A single source?

Mulheirn illustrates that because different groups come up with similar figures on housing targets it appears there is broad agreement across a range of sources. But the figures originate in a single source. Using the House of Lords paper from 2016 as an example, he states “It cites two academics at Sheffield Hallam, who report that there is a “broad consensus” that we need between 240,000 and 300,000 per year, in turn citing:

• Holmans (2013), which says 243,000 per year are needed between 2011 and 2031

• Lyons (2014), which says 243,000 — citing Holmans (2013)

• KPMG and Shelter (2015), which says ‘around 250,000’— citing Holmans (2013)

[Fixing our broken housing crystal ball, Ian Mulheirn, Jan 22, 2018].

People have compared these figures with the actual numbers of houses being built and therefore concluded that insufficient houses are being provided.

But, and it’s a big but, the actual growth in households has been far lower. In 2017, Mulheirn estimated that household numbers had increased by 152,000 per year since 2008, while comparison of the 2021 census with the 2011 census indicated a growth of 141,000 households each year in England.

There are real housing issues, real problems that require addressing. Yet none of them would be resolved by building all the additional houses deemed necessary by the 300,000 figure. That is because the cause of these problems is not one of a lack of supply, but a series of policy measures which have created the conditions responsible.

BACKGROUND NOTES

The targets

“The Government’s stated target is for 300,000 new homes per year to be developed by the mid-2020s. Other estimates put the level of need at up to 340,000 new homes per year. Current delivery is not at this level. The Conservative party’s manifesto for the 2019 General Election included a commitment for housing delivery to reach 300,000 new homes per year by the mid-2020s, and to supply 1 million new homes by the end of the current parliament.” [Tackling the under-supply of housing in England, Commons Library Research Briefing, By Wendy Wilson, Cassie Barton. 19 May 2023].

“If the government hit its target of building 300,000 homes a year, it would still take 50 years to fill the UK’s 4.3 million housing backlog, a think tank has found. Instead it would take 442,000 homes a year to be built for the next 25 years, or 654,000 built for each of the next 10 years, to end the housing crisis, according to new research from Centre for Cities.”

[https://www.bigissue.com/news/housing/it-would-take-50-years-to-build-the-homes-the-uk-needs-under-the-governments-300000-annual-target/ 2023].

“3. We welcome the Government’s target to deliver 300,000 homes per year and one million homes by 2025 to address the long-term undersupply of new housing. …While numbers have gradually increased recently, the net number of new homes built per year has not exceeded 224,000

since 2005/6.“ [Meeting housing demand. HOUSE OF LORDS, Built Environment Committee, 1st Report of Session 2021–22, HL Paper 132, published 10 January 2022].

"We have delivered 1.8 million new homes since 2010. In 2020 we delivered 244,000 new homes across our country. We have an ambition to build—as do the Liberal Democrats, apparently —300,000 homes each year by the middle of this decade.” Christopher Pincher, Planning Decisions: Local Involvement, Volume 697: debated on Monday 21 June 2021

“The latest figures show that over 222,000 new homes were delivered in England last year—clear progress towards our ambition of delivering 300,000 a year by the mid-2020s. This brings the total number delivered since 2010 to more than 1.3 million.” [The Minister for Housing (Kit Malthouse), New Homes, Volume 651: debated on Monday 10 December 2018]

"The Department’s objective for housing in England is to “support the delivery of a million homes by the end of 2020 and half a million more by the end of 2022 and put us on track to deliver 300,000 net additional homes a year on average.” The average number of new homes built from 2005–06 to 2017–18 was 177,000 a year." [House of Commons Committee of Public Accounts, Planning and the broken housing market. One Hundred and Third Report of Session 2017–19. HC 1744. Published on 26 June 2019]

“The government is committed to delivering 300,000 homes a year by the mid 2020s and has today (1 October 2018) announced further plans to speed up the planning system as well as make better use of land and vacant buildings to provide the homes that communities need. [News story Government announces new housing measures."

[https://www.gov.uk/government/news/government-announces-new-housing-measures 1 October 2018].

“… research commissioned by the National Housing Federation (NHF) and Crisis from Heriot-Watt University, which has identified a need for 340,000 homes each year to 2031 of which 145,000 “must be affordable homes”.[Tackling the under-supply of housing in England, House of Commons, Briefing Paper. Number 07671, 3 September 2018].

“Together with the reforms announced in the Housing White Paper, the Budget puts us on track to raise housing supply to 300,000 per year, on average, by the mid-2020s.” [Autumn Budget 2017. Building the homes the country need, HM Treasury, 22 November 2017].

“Up to 300,000 new homes must be built every year to help solve the housing crisis, according to Sajid Javid. He said he believed between 275,000 and 300,000 new homes, of a range of tenures, need to be built every year to begin to make a dent in the country’s housing issues”.

[https://www.huffingtonpost.co.uk/entry/sajid-javid-says-300k-new-homes-need-to-be-built-every-year-to-help-solve-housing-crisis_uk_59ec6725e4b0a484d063c9a1 22 October 2017].

"This country doesn’t have enough homes. That’s not a personal opinion or a political calculation. It’s a simple statement of fact." [Sajid Javid, DCLG, Fixing our broken housing market, February 2017].

"The housing market in this country is broken, and the cause is very simple: for too long, we haven’t built enough homes. Since the 1970s, there have been on average 160,000 new homes each year in England. The consensus is that we need from 225,000 to 275,000 or more homes per year to keep up with population growth and start to tackle years of under-supply." [DCLG, Fixing our broken housing market, February 2017].

"The Government’s target of one million new homes by 2020 is not based on a robust analysis. To address the housing crisis at least 300,000 new homes are needed annually for the foreseeable future. One million homes by 2020 will not be enough." [Building more homes, House of Lords Select Committee on Economic Affairs, 1st Report of Session 2016–17, 15 July 2016

“Everyone now accepts that we have a desperate housing shortage in England. Each year we build 100,000 fewer homes than we need, adding to a shortage that has been growing for decades. What’s more our current house building system seems incapable of delivering growth on the scale required. Growing demand means that without a step change in supply we will be locked into a spiral of increasing house prices and rents – making the current housing crisis worse.” [Building the homes we need, a programme for the 2015 government, KPMG in partnership with Shelter, 2014].

UK needs to double number of new homes to 300,000 a year: Vince Cable.

“Britain needs to build 300,000 houses a year, more than double the current number and including some on green belt land, or risk pushing house price inflation up to dangerous levels, the business secretary has said.”

https://www.theguardian.com/politics/2014/may/20/uk-double-number-new-homes-300000-vince-cable 20th May 2014.

The analysis – sources

Mulheirn, Ian. Fixing our broken housing crystal ball, 2018.

https://medium.com/@ian.mulheirn/fixing-our-broken-housing-crystal-ball-6d6405963e0

Is there *really* a housing shortage? Ian Mulheirn, Jan 16, 2017

https://medium.com/@ian.mulheirn/part-1-is-there-really-a-housing-shortage-89fdc6bac4d2

ONS, Census 2011 and 2021.