22025_The Future of UK Housing Supply_v2

S O H OW DO WE D E L I V E R MO R E H OM E S FO R OU R C I T Y O F 2 0 4 0 ?

INCREASE THE NUMBER OF HOMES WE ARE DELIVERING

In the early 1970s, close to 300,000 homes were being delivered. The big difference between now and then is that c. 40% of homes were being delivered by local authorities, but this now stands at only 1% (DLUHC). Housebuilders now deliver the majority of homes, but they haven’t increased the number of homes being delivered in order to replace the fall in local authorities’ deliveries. This is partly a consequence of the perverse incentives that the supply-demand dynamics of our housing market create for house builders.

As long as there is an undersupply of houses, prices will remain strong (ignoring other economic and geopolitical headwinds), and house builders are reluctant to undermine this. We need to find new ways to encourage private housebuilders to deliver more homes, especially with economic headwinds signalling a slower housing market, which is usually associated with lower levels of construction.

ANNUAL HOUSING DELIVERY

180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0%

1978

‘80 ‘82 ‘84 ‘86 ‘88 ‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ‘20 2022

PRIVATE ENTERPRISE

HOUSING ASSOCIATIONS

LOCAL AUTHORITIES

Source: Department for Levelling Up, Housing and Communities

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