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Research warns England faces drastic drop in social housing stock

Socio-economic experts forecast a dire scenario for England’s 2040 population with a potential loss of 385,887 social homes.
L-R Dan Usher and Craig Pettit, of Marrons

England’s dwindling social housing stock is poised to plummet by an additional 385,000 properties by 2040 – a harrowing forecast that comes in the wake of alarming surges in council house waiting lists, groundbreaking research by socio-economic experts at Marrons has revealed.

The latest figures show that only 16% of the 295,197 social rent properties owned by local authorities and registered providers that were sold or demolished nationally between 2015/16 and 2021/22 have been replaced. If this continues at its current level, it will result in a net loss of 385,887 homes by 2040.

The revelation is compounded by high levels of under-occupancy, which is creating gridlock in the market; according to the research, 52% (4.5 million) of 65+ households are expected to be under-occupied by two or more bedrooms in 2040.

Utilising the latest ONS Census data (2021) and 2018-based population projections, Marrons has painted a clear picture of England’s housing need in 2040 in its latest report. Supplementing this is data from local authority housing registers, social housing stock records and extrapolated housing requirement figures using the government’s standard method.

Dan Usher, economics director at Marrons, who specialises in housing need evidence, said: “The introduction of the Right to Buy scheme, which enabled council tenants to buy their homes for a significantly reduced price, was turbo-charged in 1980. Within five years, half a million council homes had been sold under the initiative in England alone.

“England is losing social housing much faster than it is being built and the losses are mounting up – in fact, according to housing and homelessness charity Shelter, social housebuilding in England being at its lowest rate in decades. Demand is continually outstripping supply, leaving the poorest households with no choice but to enter unaffordable private tenancies – putting them at risk of homelessness.”

By 2040, England’s 16+ population is expected to grow by 6% to almost 50 million people. Notably, Greater London and the East Midlands are the fastest-growing regions – each anticipating 12% growth to 8 million and 4.5 million, respectively – while the North East shows the slowest growth at 5% to reach 2.3 million people.

To meet the burgeoning demand, at least 5.4 million homes need to be constructed across England by 2040. The South East leads the way in housing need outside of Greater London, with demand for more than 950,000 homes. In contrast, the North East demands the least, with a requirement of 112,388 properties.

Craig Pettit, planning director at Marrons, said: “We are nowhere near meeting the government’s minimum housing need of 300,000 properties a year – the average is 215,000 over the past decade – so parliament’s response to its own target is grossly inadequate. However, the obsession with the number is meaningless if hitting targets is prioritised over and above the needs of local populations.

“While the planning system is undoubtedly broken, it is likely a convenient cover up for a much bigger issue. We have the tools, expertise and space to plan properly, but development of any kind has simply become undesirable to the public. The government-orchestrated rhetoric that focuses on the potential negative impacts of development – rather than taking time to understand the benefits – is wrong.

“If we are going to meet the needs of the population in 2040, we need to prioritise the needs of future residents and start building the right homes today. We must utilise the vast array of data we have at hand to futureproof our villages, towns and cities – taking a long-term view of the issue and offering the appropriate mix of housing types and tenures that caters to the needs of each local population.

“We must alter the common public perception that no new development is considered a ‘win’ and promote a proactive way of planning sustainably, rather than remaining in this never ending reactive cycle, which will only continue to breed discontent with the industry.

“A national housing policy – supported by a proper approach to regeneration, systematic review of green belt and an in-depth understanding of the socio-economic needs of a location – will highlight areas of opportunity and meaningful change. Without this, we will see no movement in the market or developments that do not serve the population’s needs, placing the housing crisis in gridlock.”

The later living demographic (aged 66+) is set to witness a 37% increase, with the East Midlands experiencing the greatest surge (41%) and the North East demonstrating the slowest growth (29%).

Alarmingly, 52% of properties (4.5 million) occupied by those aged 65+ are projected to be under-occupied by two or more bedrooms[ii] in 2040. The South West is expected to have the highest under-occupation rate (57%), while Greater London is anticipated to have the lowest (42%).

Dan said: “There is no doubting the impact under-occupied homes have on the housing crisis. It is estimated that for each bedroom added to the retirement stock, two to three are released in mainstream housing, so pulling people through the market will increase the number of family homes available.

“Furthermore, older people living in accommodation better suited to their needs improves the quality of their life, while reducing pressure and easing the burden on the NHS and community social care, which has huge benefits for local authorities and government.

“This presents strong opportunities for developers to invest in the later living market and create links between housing associations, investment funds and local authorities to offer greater choice to the consumer in terms of location, style and facilities. However, we also know that even with greater choice there are still many older homeowners who will never move – placing even greater importance on building general market housing.”

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