Comment

Where we were: a picture of housing delivery in England before lockdown

The Government has today published new data on housing supply in England, which authoritatively captures all “net additional dwellings” and is therefore considered the key metric against which to measure progress towards its longstanding goal of delivering 300,000 homes per annum.

The data can be found here.

There is always a time lag with this dataset, which is released every November to cover the year to the end of the previous March. This is arguably more significant than ever this year, as it leads the data to provide a largely untainted view of trends in housing delivery before the pandemic struck, even where it technically captures a couple of weeks in which construction sites had shut down in March.

At the national level, there were a net additional 243,770 homes recorded over the year to the end of March 2020. This was marginally up on last year, by 0.8%, and once again represents the highest rate of provision for at least thirty years.

This increase was driven by London and the North of England, the latter comprised of the North West, North East, Yorkshire and the Humber. The capital surpassed its recent peak by delivering around 41,700 homes, while the North significantly surpassed a longer standing record – that has stood since 2007/08, before the last recession – by delivering some 63,200 homes, around 5% up on last year. The Midlands and the South, excluding London, were in contrast unable to sustain or better the record levels of delivery achieved last year, and both saw reductions of circa 4-5% this time around.

It is impossible not to revisit our concerns about the standard method of assessing housing need in this context. It remains illogical for the existing method to suggest that the North, for example, needs only 43,260 homes each year, when it has delivered more in each of the last four years and has now outperformed this figure by as much as 46%. The revised approach proposed this summer did not resolve this critical issue, and threatened to allow a 21% fall from existing delivery in the North despite targeting a 38% boost nationally (and a 124% boost in London). The Government has intimated that it is actively working on ‘a fairer formula’ that directs more homes to urban areas in the North and Midlands. In this context it is interesting to note that Greater Manchester delivered net completions of over 13,700 – well above the 10,500 that the troubled Greater Manchester Spatial Framework is proposing.

We cannot escape the fact that delivery for the year to March 2020 is unlikely to be sustained at these levels as next year’s release will reveal the real impact of the pandemic on housing delivery. While the rapid adaptation of the homebuilding industry to COVID secure working and record rates of mortgage approvals confirm both need and demand for new homes remains high, the impact of the closure of construction sites during the original lockdown is bound to have suppressed output for the year. We should not, however, lose sight of where we were and what had been achieved, and indeed this recent performance might act as a benchmark as the industry recovers with the support of the planning system.

Please contact Andrew Lowe for further information.

26 November 2020