Regular readers will be aware that many of these journal pieces focus on community. That’s our passion and ‘community focus’ will remain the beating heart of every project in which we are involved.
There is, of course, a simple premise that sits behind creating wonderful communities. Namely, the need to build more homes in the first place. This piece is a reminder of how crucial that need is, and why it is a driver behind government policy.
Our lives revolve around our homes and local communities. They are where we eat and sleep, bring-up our families, walk the dog and pop out for a coffee. Everyone is entitled to those things.
Sadly, the housing sector has many fundamental flaws. The average age of first-time buyers in the UK last year was 34. Young adults are increasingly living ‘at home’ until then. Some have speculated that this is contributing to falling birth rates. Meanwhile, rent levels make it increasingly difficult for those who wish to save, concurrently, for a deposit.
Here are facts around the UK’s housing market that help make the case for building more homes. Most come back to the basic economics of supply and demand.
It costs increasingly more to own and rent a home
In 1997[1], a homeowner would expect to buy a property valued at 3.5 times their annual income.
Last year, that figure had risen to a multiple of 8.3. This makes the UK (by this metric) the 5th most expensive OECD country in which to buy a house. [2]
Earnings have doubled in that period, but house prices have increased by 4.5 times.[3]
This means the real price of a home has more than doubled in relation to salaries.
Meanwhile, in the 12 months to August 2024, rents rose across England by an average of 8.4%.[4] In the five years from February 2019 to 2024, they increased by an average of 22%. For many of those unable to buy, renting is increasingly expensive.
Demand is growing quicker than supply.
More older adults are living for longer in the ‘family home’
Understanding these figures is not as simple as studying birth and death rates and net migration figures. A major cause of the housing deficit is the way larger buildings are used.
In a perfect market, larger homes would be filled by larger families. Smaller homes would be for couples or people living alone.
In England, 76% of homes have at least one unoccupied bedroom. This increased by 1% between the Censuses of 2011 and 2021.
Where householders are over the age of 65, underoccupancy increases to 86%[5].
As a country we have the 8th highest rooms to occupier ratio in the OECD[6].
The Financial Times[7] suggests that only 25% of those aged over 55 have considered downsizing. Were they all to sell their homes, approximately three million more properties would become available.[8] However, many people are remaining in situ after their children have left home. They are inadvertently contributing to a market in which other young people find moving out unaffordable.
Some wish to stay put because they can see the value of their home appreciating. Others are emotionally attached to the place and their local community. These are, of course, completely logical and understandable decisions.
They do, however, mean that demand for larger homes outstrips supply. One consequence is that the cost of stepping-up the housing ladder increases with each rung. As recently as 2020, house prices for existing homeowners moving home rose by 6.4%, compared with 4.5% for first-time buyers. [9] It is even harder to upsize than to enter the housing market for the first time.
More younger adults are remaining in the family home
As the supply of affordable new homes falls, many younger adults feel they have nowhere to go. Increasingly, they are staying put.
Between 1996 and 2019, the proportion of all 20 to 34-year-olds living with their parents increased from 21% to 27%.[10]
Between 2011 and 2021, the total number of adult children living with their parents increased to 4.9 million. Their average age rose from 23 to 24. And that’s still a decade younger than the average age at which they can buy their first home.
One home isn’t enough
Some people are holding-on to properties with empty bedrooms. Some are buying additional homes that are empty much of the year. 4.1% of UK homeowners included more than one address in the 2021 Census. That’s a rise of 11% in a decade.[11]
This limits supply, unhelpfully for people looking to buy their first home.
More parents are moonlighting as bankers
The reliance on parents is not restricted to those living under the same roof. In 2023, of those who left home to become first-time buyers in the UK, 36.5% reported having financial help from family and friends. That represents a 66% rise over the previous decade.
So …
It is possible to argue that many of these trends are cause or effect of the housing crisis. Net migration also plays a role. Either way, we don’t just want to alleviate the crisis, but to create better ways of living. We want to build wonderful places and homes that are attractive and desirable, not least because of the communities that develop in and around them. Those places must offer homes with a range of sizes and prices. That will allow younger families to move in alongside those who are excited to downsize once their own families have flown the nest!