14 March 2011
England faces a massive shortfall of homes unless housing policy is radically changed, the Institute for Public Policy Research warns today.
In a report, The good, the bad and ugly: housingdemand 2025, the think-tank says the shortfall could reach 750,000 homes by 2025. Even an economy that remained sluggish in the long term would generate demand for more than 200,000 new homes each year, the IPPR predicts, and a strong economic recovery would increase that figure to 280,000.
But supply would remain far adrift of demand if home building continued at the average of just 160,000 new homes a year over the past 20 years.
The IPPR calculated the shortage by analysing government projections of housing demand. It has now launched a year-long inquiry into housing supply, allocations and management and the sector’s links to the wider economy.
IPPR director Nick Pearce said: ‘If the rate of house building doesn’t radically increase, we face a growing housing crisis.
‘Whether the economy performs well or poorly, a serious gap looms between housing supply and demand.’
The IPPR said London, the Southeast, east of England, and Yorkshire and the Humber would experience the most acute problems.
Only the Northwest was likely to meet demand, because of its high number of unoccupied properties, which could be brought back into use.
Social housing would be particularly hard hit. Some 1.8 million households are on waiting lists but the amount of public grant available for housing association new build has been cut from £8.4bn over the past three years to £4.4bn over the next four.
The government has argued that its new category of affordable rents – those set at 80% of local market values – will provide more social housing by creating an income stream against which associations can borrow to finance new build.
