A study conducted by LandlordBuyer has highlighted a significant 41% increase in housing developments across the UK over the past decade, despite continuing struggles with the issue of overcrowded housing affecting local government areas.
The study showcased that from January to September 2023, the UK witnessed the completion of 138,570 new housing units, a marked 41% increase from the figures recorded a decade prior, with 98,080 units constructed between January and September 2013.
Yet, this notable increase in housing developments has not fully addressed the issue of overcrowding, with over 1.1 million households in England and Wales still classified as ‘overcrowded’, equating to 4% of all households.
This overcrowding issue is more pronounced in major urban centres such as Birmingham, London, and Leicester, and is especially prevalent among private rental sector households (7% of households) and social housing sector households (9% of households), as opposed to those households that are owner-occupied (2% of households).
Jason Harris-Cohen, Managing Director of LandlordBuyer, commented, “It’s absolutely essential that we build more new homes, and it’s great to see an uplift in supply over the last decade. While this is positive, we need to look at how the figures break down to establish why we still have a serious issue of overcrowding.”
He further explained, “While 153,300 new build homes were started in 2023, only 138,570 were actually completed/built. That means almost 15,000 new homes never made it over the line in the year construction started.”
Harris-Cohen highlighted the workforce shortage and the escalation of material costs as substantial barriers to the completion of many housing projects, calling for more supportive action from local authorities towards the construction sector.
He also scrutinised the distribution of new housing, pointing out, “The allocation of new homes also needs scrutiny. Overcrowding is most prevalent in the social housing sector but housing associations and local authorities only gained 32,290 new homes in 2023. Conversely, the private sector gained 106,280 new homes – an out-of-kilter proportion given owner-occupiers were the least likely to suffer overcrowding.”
Harris-Cohen suggested that private landlords could play a key role in reducing overcrowding.
He stated, “New builds are an attractive proposition as they are low maintenance and energy efficient but they have always attracted a price premium. Furthermore, landlords have tended to favour apartments in city centre locations – the locations identified where overcrowding is at its worst. When figures show 7% of private renting households suffer from overcrowding, more houses to rent, rather than a saturation of flats, may help address the issue.”
Concluding, Harris-Cohen urged developers to offer more incentives to private landlords to encourage investment in family homes, “It does fall on housebuilders, however, to incentivise private landlords in the same way they do owner-occupiers. Legal fees paid, a stamp duty contribution and a furniture pack attached to family homes would help property investors reassess what they purchase and where.”
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