'Housing shortage crisis' predicted in IPPR report

Houses Some areas of England face a bigger housing shortfall, the report says

England is facing a "growing housing crisis", according to a report which estimates a shortfall of 750,000 homes by 2025.

The country needs to build more homes even if the economy continues to falter, the Institute for Public Policy Research (IPPR) concludes.

It found the biggest shortfall would be in London, the South East of England, the East, and Yorkshire and Humberside.

Only in the North West of England could supply meet demand, it said.

Projections

The think tank studied a number of different economic scenarios, and how this would affect the housing stock.

A faltering economy would still lead to demand for more than 200,000 homes a year, it concluded. There was a need for 280,000 more homes a year needed if the economy bounced back strongly.

Using the government's projection for household numbers would lead to a shortfall of 750,000 homes by 2025, it found.

On a regional basis the biggest effect would be in London, with a housing gap of 325,000 homes, followed by Yorkshire and Humberside with 151,000 homes too few.

Housing shortfall by 2025

  • London: 325,000
  • Yorkshire and Humberside: 151,000
  • East of England: 132,000
  • South East of England: 77,000
  • East Midlands: 66,000
  • West Midlands: 28,000
  • North East of England: 16,000
  • South West of England: 7,000

Source: The good, the bad and the ugly: Housing demand 2025, by the IPPR

"We cannot go on as we have done. Britain needs to build more homes. That is not going to happen without a fundamental review of housing policy," said IPPR director Nick Pearce.

"If the rate of housebuilding does not radically increase, we face a growing housing crisis. Whether the economy performs well or poorly, a serious gap looms between housing supply and demand.

"Our ageing population and rising expectations for living standards are going to drive up demand, but if there is no change in housing policy it will seriously hold back supply."

Such a shortfall of homes would inevitably have a effect on house prices.

The report said that only in the North West would there be more homes than households.

A spokeswoman for the Department for Communities and Local Government, said: "The government has introduced a wide package of reforms designed to boost housebuilding, including reform to the planning system."

She said the New Homes Bonus, to be introduced in April, would boost affordable homes with funding from the additional council tax raised for new homes and empty properties brought back into use.

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