LandlordBuyer Discovers 41% Rise in UK Home Construction Over a Decade

LandlordBuyer Discovers 41% Rise in UK Home Construction Over a Decade

LandlordBuyer’s recent investigation has unveiled a significant 41% rise in home construction across the UK over the past ten years, even as the battle against housing overcrowding persists for many local councils.

According to the investigation, the period from January to September 2023 witnessed the construction of 138,570 new housing units in the UK, marking a substantial 41% increase from the figures recorded a decade ago, with 98,080 units built between January and September 2013.

Despite this remarkable progress, the issue of overcrowding affects over 1.1 million households in England and Wales, representing 4% of the overall households.

Urban regions, notably Birmingham, London, and Leicester, exhibit higher rates of overcrowding, with the phenomenon more frequently observed among households renting privately (7% of households) and in social housing (9% of households), compared to those owned by their inhabitants (2% of households).

Jason Harris-Cohen, Managing Director at LandlordBuyer, stated, “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 added, “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 identified a labour shortage and increased material costs as key issues impeding the completion of many new housing projects, calling for more supportive measures from local authorities towards construction firms.

The distribution of new homes also came under his scrutiny, “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 role in addressing the overcrowding problem.

He elaborated, “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.”

He concluded by encouraging developers to offer more incentives to private landlords for investing 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.”