NIMBYs and rising migration have both been blamed for the UK’s housing shortage. What’s the actual problem, asks Ben Hopkinson
It is clear that the UK does not have enough homes for its population. There are two stories about why this has happened. The first, told by YIMBYs, is that it is simply too hard to build homes and expand the housing supply. The other, told by migration hawks, is that the record numbers entering Britain have driven up demand for scarce properties. Both have a truth to them, and action solely on one is not enough to end the housing crisis.
How bad is the UK’s housing shortage?
Of all the major Western European countries, the UK has the second fewest homes per 1,000 people. To catch up to the average, the UK needs 6.9m more homes. This number has grown from 6.5m homes using 2023 data, as net migration has outpaced our ability to build homes, which isn’t true for most other European countries. England accounts for 6.2m of those missing homes.
Historically, the UK, and especially England, has not built enough homes. Since the early 1980s, France has grown its housing stock by an average of 1.07 per cent a year, while England has only managed 0.82 per cent a year. This may seem like a small difference, but it adds up after four decades of compounding.
England has averaged only 178,000 homes a year. Matching France’s housing stock growth would require building 246,000 homes a year. Achieving the government’s 300,000 home a year target would be useful for helping to close the gap. Sadly it is almost certain to be missed, with even Angela Rayner, the re-appointed housing secretary, conceding the manifesto commitment was actually a ‘stretch target’.
Had England matched France’s building rate since the early 1980s, it would have 2.9m additional homes. This alone would have been enough to close half of England’s housing shortage.
Every single year, France has expanded its housing stock faster than its population has grown. England cannot say the same. After barely rising from the mid-2000s, England’s homes per 1,000 peaked in 2021. Since then, high levels of migration have reduced this number. This means that the housing shortage is getting worse despite 1.1m homes being built since 2020.
This is where the migration hawk story comes in, with claims that large-scale migration has driven up demand for our paltry supply of homes.
Has migration contributed?
Had net migration been capped at 100,000 a year since 1997, and the rate of housebuilding remained unchanged, England would now have 473 homes per 1,000. That makes up about a third of the gap that England has with the rest of Western Europe.
The recent spike of migration has given further credence to the demand-side story. Had net migration stayed in the tens of thousands since 2020 instead of the record-breaking wave, house prices would be roughly £15,270, or 5.2 per cent, lower in England. This spike in migration could be the missing puzzle piece that explains why high interest rates have not had the catastrophic impact on house prices that many predicted.
So where do these two stories leave us? Building an achievable number of homes could have closed half the gap, while keeping to the oft-made manifesto pledge of tens of thousands not hundreds of thousands of net migrants would have closed a third of the gap. Both help explain why there are so few homes per capita in the UK. Combined, they would have come close to ending the housing shortage.
The mismatch between high demand and low supply drives many of the symptoms of the housing crisis: the unaffordability of properties, smaller and lower quality homes, and the young being priced out of home ownership.
We don’t have a time machine to change the policy decisions made decades ago that have caused the housing crisis. But the policy choices taken today and after the next general election will decide whether we make progress in closing our housing shortage or allow it to grow even more.
Ben Hopkinson is the head of housing and infrastructure at the Centre for Policy Studies