Housing in the United Kingdom

Housing in the United Kingdom represents the largest non-financial asset class in the UK; its overall net value passed the £5 trillion mark in 2014.^[1] Housing includes modern and traditional styles. About 30% of homes are owned outright by their occupants, and a further 40% are owner-occupied on a mortgage. About 18% are social housing of some kind, and the remaining 12% are privately rented.^[2]

The UK ranks in the top half in Europe with regard to rooms per person, amenities, and quality of housing.^[3][4] However, the cost of housing as a proportion of income is higher than average among EU countries,^[3] and the increasing cost of housing in the UK may constitute a housing crisis for some, especially in London.^[5][6][7]

Housing is the jurisdiction of the Minister of State for Housing, Planning and Building Safety.^[8]

In the medieval era and later, houses were often built of timber^[9] and were heated by fires. Houses were typically built individually until the advent of town planning in the Georgian era, when terraces began to be built.^[10]

Rapid population growth took place in the nineteenth century, particularly terraces in cities with the widespread adoption of mass-produced bricks.^[11] The new homes were arranged and funded via building societies that dealt directly with large contracting firms.^[12][13] Private renting from housing landlords was the dominant tenure. People moved in so rapidly that there was not enough capital to build adequate housing for everyone, so low-income newcomers squeezed into increasingly overcrowded slums. Clean water, sanitation, and public health facilities were inadequate; the death rate was high, especially infant mortality, and tuberculosis among young adults.^[14][15][16] Despite this, house prices actually fell for seventy years from the 1840s due to the expansion of the railway network which made it attractive to build on land that had previously been very distant from urban centres.^[17] The stock of houses expanded from around 1.6 million in 1801 to 7.6 million by 1911 (and, specifically, by nearly 5 million between 1870 and 1914, an average of around 110,000 per year^[18]), but there was a disproportionate focus on building houses for the middle and upper classes, hence the frequent poor conditions experience by the lower classes referenced above.^[19]

The rapid expansion of housing was a major success story of the interwar years, 1919–1939, standing in sharp contrast to the United States, where the construction of new housing practically collapsed after 1929. The total housing stock in England and Wales was 7,600,000 in 1911; 8,000,000 in 1921; 9,400,000 in 1931; and 11,300,000 in 1939,^[20] an average rate of over 180,000 per year between 1921 and 1939.

The private rent market provided 90% of the housing before the war. Now it came under heavy pressure, regarding rent controls, and the inability of owners to evict tenants, except for non-payment of rent. The tenants had a friend in Liberal Prime Minister, David Lloyd George, and especially in the increasingly powerful Labour Party. The private rent sector went into a prolonged decline and never recovered; by 1938, it covered only 58% of the housing stock.^[21]

A decisive change in policy was marked by the Tudor Walters Report of 1918; it set the standards for council house design and location for the next ninety years.^[22][23] It recommended housing in short terraces, spaced at 70 feet (21 m) at a density of twelve to the acre.^[24] With the Housing, Town Planning, &c. Act 1919 David Lloyd George set up a system of government housing that followed his 1918 election campaign promises of "homes fit for heroes." It required local authorities to survey their housing needs, and start building houses to replace slums. The treasury subsidised the low rents. The immediate impact was the prevalence of the three-bedroom house, with kitchen, bathroom, parlour, electric lighting, and gas cooking, often built as subsidised council housing. Major cities such as London and Birmingham built large-scale housing estates – one in Birmingham had a population of 30,000 residents. The houses were built in blocks of two or four using brick or stucco, with two storeys. They were set back from curving streets; each had a long garden. Shopping centres, churches and pubs sprang up nearby. Eventually, the city would provide a community hall, schools, and a public library. The residents typically were the upper fifth stratum of the working-class. The largest of these two communities was Becontree in the outer suburbs of London, where construction began in 1921, and by 1932 there were 22,000 houses holding 103,000 residents.^[25] Slum clearance now moved from being a public health issue, to a matter of town planning.^[26]

Liberal MP Tudor Walters was inspired by the garden city movement, calling for spacious low-density developments and semi-detached houses built to a high construction standard. Older women could now vote. Local politicians consulted with them and in response put more emphasis on such amenities as communal laundromats, extra bedrooms, indoor lavatories, running hot water, separate parlours to demonstrate their respectability, and practical vegetable gardens rather than manicured yards. The housewives had had their fill of chamber pots.^[27][28] Progress was not automatic, as shown by the troubles of rural Norfolk. Many dreams were shattered as local authorities had to renege on promises they could not fulfill due to undue haste, impossible national deadlines, debilitating bureaucracy, lack of lumber, rising costs, and the unaffordability of rents by the rural poor.^[29]

In England and Wales, 214,000 multi-unit council buildings were built by 1939; making the Ministry of Health largely a ministry of housing.^[30] Council housing accounted for 10% of the housing stock in the UK by 1938, peaking at 32% in 1980, and dropping to 18% by 1996, where it held steady for the next two decades.^{[31][32][33][34]}

The fierce debates over high-rise housing that took place after 1945 were presaged by an acrimonious debate in the 1920s and 1930s in London. On the political left there was firm opposition to what were denounced as "barracks for the working-classes". Reformers on the right called for multi-storey solutions to overcrowding and high rents. There were attempts at compromise by developing new solutions to urban living, focused especially on slum clearance and redevelopment schemes. The compromises generally sought to replace inhospitable slums with high-rise blocks served by lifts. In the Metropolitan Borough of Stepney they included John Scurr House (built 1936–1937), Riverside Mansions (1925–1928) and the Limehouse Fields project (1925 but never built).^[35]

Increasingly the British ideal was home ownership, even among the working class. Rates of home ownership rose steadily from 15 percent of people owning their own home before 1914, to 32 percent by 1938, and 67 percent by 1996. The construction industry sold the idea of home ownership to upscale renters. The mortgage lost its old stigma of a millstone round your neck to instead be seen as a smart long-term investment in suburbanized Britain. It appealed to aspirations of upward mobility and made possible the fastest rate of growth in working-class owner-occupation during the 20th century.^[36][37] The boom was largely financed by the savings ordinary Britons put into their building societies. Starting in the 1920s favourable tax policies encouraged substantial investment in the societies, creating huge reserves for lending. Beginning in 1927, the societies encouraged borrowing through gradual liberalization of mortgage terms.^[38]

Housing was a critical shortage in the post-war era. Air raids had destroyed half a million housing units; repairs and maintenance on undamaged homes had been postponed. 3,000,000 new dwellings were needed. The government aimed for 300,000 to be built annually, compared to the maximum pre-war rate of 350,000. However, there were shortages of builders, materials, and funding. The Ministry of Works undertook the publication of a set of Post War Building Studies, that established technical guidelines for the use of new or modernised building materials. Not counting 150,000 temporary prefabricated units, the nation was still 1,500,000 units short by 1951. Legislation kept rents down, but did not affect purchased houses. The ambitions of the New Towns Act 1946 (9 & 10 Geo. 6. c. 68) project were idealistic, but did not provide enough urgently needed units. When the Conservative Party returned to power in 1951, they made housing a high priority and oversaw 2,500,000 new units, two-thirds of them through local councils. Haste made for dubious quality, and policy increasingly shifted toward renovation rather than new builds. Slums were cleared, opening the way for gentrification in the inner cities.^[39]

According to a 2018 study in the Economic History Review, the ‘stop-go’ macroeconomic policy framework adopted by the Treasury and the Bank of England from the mid-1950s to the early 1980s restricted housebuilding during the period.^[40]

Working-class families proved eager to purchase their council homes when the Thatcher ministry introduced the "Right to Buy" scheme in 1980, alongside restricting the construction of new council houses.^[41] Consequently, most housing was built by private developers of which the largest included George Wimpey, Barratt Developments and Redrow plc. Timber frames were used instead of masonry structures,^[42] although brick remained common as a facing material. For energy efficiency, PVC doors and windows replaced the use of wood and cavity wall insultation became compulsory.^[43] Developments typically provided for car parking which had historically taken place on street.^[44]

At the same time urban renewal schemes resulted in the conversion of disused industrial buildings such as warehouses to apartments. Examples include Rotherhithe and Wapping alongside the Thames in London and the Albert Dock in Liverpool. There was also widespread construction of purpose-built apartment blocks including Wembley Park and Stratford in London, Salford Quays and Beetham Tower in Manchester.

There are approximately 23 million dwellings in England and some 27 million across the UK. In 2009, about 30% of homes were owned outright by their occupants, and a further 40% were owner-occupied on a mortgage. About 18% are social housing of some kind, and the remaining 12% are privately rented.^[2] The overall mean number of bedrooms is approximately 2.8. Just under 40% of households have at least two spare bedrooms.^[45] 20% of dwellings were built before 1919 and 15% were built post 1990.^[45] 29% of all dwellings are terraced, 42% are detached or semi-detached, and the remaining 29% are bungalows or flats. The mean floor area is 95 square metres.^[45] Approximately 4% of all dwellings were vacant.^[45] Approximately 385,000 households reported a fire between 2012 and 2014, the majority of which were caused by cooking.^[46] In 2014 2.6 million households moved dwelling, the majority of which (74%) were renters.^[45]

The Labour government suspected that there might be supply-side problems in the construction sector, and in 2006 commissioned the Callcutt Review of House Building Delivery,^[48] which was published in 2007. The Callcutt report noted the failure of the home building industry to increase the supply in response to price signals.^[49] There was a fall in the numbers of house completions after the 2008 recession, but by 2015 it was back up to 169,000.^[50]

According to the Centre for Ageing Better 21% of homes in the UK were built before 1919, 38% before 1946, and only 7% after 2000, making the British housing stock older than any European Union countries.^[51]

Local planning authorities are required to continuously maintain sufficient land to meet housing needs for five years.^[52] It is estimated 250,000 new homes are needed each year just to keep up with the demand of the UK's continually growing population.^[53]

After adjusting for inflation, the average cost of a home increased by a factor of 3.4 between 1950 and 2012.^[54]

In September 2015 the average house price was £286,000, and affordability of housing as measured by price to earnings ratio was 5.3.^[55] The UK's home dwelling cost per type in July 2018 was on average:^[56]

• Detached: £378,473
• Semi-detached: £230,284
• Terraced: £200,889
• Flat/maisonette: £230,603

London is ranked as the top city in the world in terms of the number of ultra high net worth individuals who are resident in a city.^[57] The consequence of this is seen in the high price for top-end dwellings. The most expensive home ever sold in the UK was 2–8a Rutland Gate, Hyde Park, which sold for £280 million in 2015.^[58] The most expensive street in the UK is Kensington Palace Gardens, London, where the average price of a home is approximately £42 million.^[59]

A report for Wandsworth Borough Council found that overseas investors had a positive effect on housing affordability, both in bringing forward new homes in general and allowing the affordable housing part of schemes to be brought forward more quickly. They also found that there was very little evidence of housing being left empty.^[60] Dwellings represent the largest non-financial asset in the British balance sheet, with a net worth of £5.1 trillion (2014).^[1] In the national statistics rising house prices are regarded as adding to GDP and thus a cause of economic growth.

Nearly two out of five households rent their home.^[61] However, the supply of rental properties has been declining since 2016 when the taxation treatment of rental property turned against landlords.^[62] Nearly all dwellings are let using Assured shorthold tenancy agreements.^[63] For the initial period, typically six months or a year, neither side can terminate the agreement. After this period, landlords can terminate the agreement at two months' notice.

Council Tax is paid by the occupier of the home unless it is a house in multiple occupation (HMO) when the landlord is liable. In London, rents are double the national average, meaning that living in London has become a luxury good. People on median incomes who work in central London often live in the outer suburbs of London and the commuting towns of South East England.^[64]

In 2023, rental costs in England are found to be 25.4% more affordable than owning a property with a mortgage, marking the first time this has occurred since 2010. In Wales, renting is 15.8% more economical than owning a mortgaged property. However, in Scotland, owning a property with a mortgage is 5.5%^[65] more cost-effective than renting, and in Northern Ireland, it's 7.3% more advantageous to own a mortgaged property compared to renting.^[66][67]

The Renters Reform Bill would have impacted on both the 11 million private renters and 2.3 million landlords in England. The bill was opposed by a number of MPs. Of the 47 MPs who signed amendments that weakened the protections provided by the bill, 14 of them were themselves landlords.^[68]

After the announcement of the 2024 general election, the bill was axed during the parliamentary wash-up period.^[69]

The Renters Reform Bill would have:^[70]

• Abolished section 21 ‘no fault’ evictions and move to a tenancy structure where all assured tenancies were periodic;
• Introduced more comprehensive possession grounds so landlords could still recover their property (including where they wish to sell their property or move in close family) and to make it easier to repossess properties where tenants were at fault, for example in cases of anti-social behaviour and repeat rent arrears;
• Provided stronger protections against eviction by ensuring tenants were able to appeal excessively above-market rents which were purely designed to force them out. Landlords would still be able to increase rents to market price for their properties and an independent tribunal would have made a judgement on this, if needed. To avoid fettering the freedom of the judiciary, the tribunal would continue to be able to determine the actual market rent of a property;
• Introduced a new Private Rented Sector Ombudsman which would have provided fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system;
• Created a Privately Rented Property Portal to help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement. It would have also supported local councils – helping them target enforcement activity where it was needed most;
• Give tenants the right to request a pet in the property, which the landlord must consider and cannot unreasonably refuse. To support this, landlords would have been able to require pet insurance to cover any damage to their property.

In June 2015 there were approximately 67,000 households in England in temporary accommodation.^[71] In autumn 2014 there were around 2,400 rough sleepers in England, 27% of which were in London.^[72][73] In 2018, around 320,000 people were homeless in the United Kingdom, both adults and children.^[74]

The United Kingdom ranks highly in Europe with regard to rooms per person, amenities, and quality of housing.^[3][4]

The consequence of the housing shortage manifests itself in overcrowding rather than In homelessness, The problem of over crowding is especially acute in London.^[75] In 2011 it was estimated that there were 391,000 children in London living in overcrowded conditions.^[76] Between 1995–1996 to 2013-2014 overcrowding, as measured by the bedroom standard increased from 63,000 households to 218,000 households.^[77] The bedroom standard understates overcrowding. It does not include potential household units forced to live in the same dwelling. For example, divorced couples living in the same dwelling, adult children being unable to form own household but having to live with their parents.^[78] A report issued in 2004 reviewed the evidence that overcrowding, in addition to the known impacts on physical health, adversely affects mental health and child development.^[79]

It is useful to consider housing quality under two sub-headings: physical and social. In the era of Beveridge Consensus there were large-scale slum clearance projects. Council environmental health officers inspected dwellings in a borough and those which failed to meet standards were compulsorily purchased for a nominal sum and demolished.^[80] New dwellings were built to rehouse the slum dwellers. Slum clearance significantly improved the physical quality of the British housing stock. But in a seminal study Family and Kinship in East London it was found that although the physical quality of the housing had improved, its social quality had deteriorated. The residents of apartments in tower blocks appreciated their clean, warm, bright new apartments, but missed the supportive community networks of the slums.

The overall quality of English housing stock has improved over the last thirty years, however, the quality of housing for new households varies.^[81]

The Building Better, Building Beautiful Commission was an independent body that advised the Ministry of Housing, Communities and Local Government on how to promote and increase the use of high-quality design for new build homes and neighbourhoods in the United Kingdom. The research was conducted on behalf of the Commission, and the findings have informed the recommendations in the report. It supports the creation of more beautiful, greener communities. The commission had 3 primary aims:^[82]

1. To promote better design and style of homes, villages, towns and high streets, to reflect what communities want, building on the knowledge and tradition of what they know works for their area.
2. To explore how new settlements can be developed with greater community consent.
3. To make the planning system work in support of better design and style, not against it.

There is a particular problem with dwellings built before World War I (1914-1918), which are now over hundred years old.^[83] The terraced houses of this period, built for sale to the buy-to-let investors of the time, are particular difficult to insulate. These dwellings were built for heating by open coal fires, and had large drafty windows to allow the fire to draw. They have very small rooms and have solid walls with a single leaf of bricks. This structure makes wall insulation expensive and in many cases impractical.^[84] Many of the dwellings of this type were replaced by council houses in the post war slum clearance program, but with the ending of public sector building of dwellings this route for improving the energy efficient of the housing stock ended.

There also insulation problems in the pre-1914 large houses built for the top decile of the time. These houses were built with servant quarters in the roof space. Most such houses have been converted into blocks of flats and sold to buy to let investors.^[85] These flats are difficult to insulate, especial the top floor flat in the roof space.^[86] The expense of insulation means that it is not often not cost effective for the landlord to insulate such dwellings. This is especially true in London, where due to the housing crisis, landlords can let a property in poor condition, and consequently improving the energy efficiency of a dwelling is not a priority for buy to let investors.

The Green Deal provided low interest loans for energy efficiency improvements to the energy bills of the properties the upgrades are performed on.^[87] These debts are passed onto new occupiers when they take over the payment of energy bills. The costs of the loan repayments should be less than the savings on the bills from the upgrades, however this will be a guideline and not legally enforceable guarantee. It is believed that tying repayment to energy bills will give investors a secure return. The Green Deal for the domestic property market was launched in October 2012. The Commercial Green Deal was launched in January 2012 and released in a series of stages to help with the varying needs and requirements of commercial properties.

According to official statistics, in October 2015, there were 600,179 vacant dwellings in England, a decline from the 610,123 from a year earlier. Of these vacant dwellings, 203,596 were vacant for more than six months.^[89] This, it is believed, is mainly due to financial reasons, such as the owner being unable to sell the house or raise enough money to renovate the property.^[90] In November 2017, the government allowed councils to charge a 100% council tax premium on empty homes.^[91]

According to official statistics, the percentage of empty homes in England fell from 3.5% in 2008 to 2.6% in 2014.^[92] One explanation for this housing transactions have picked up since the financial crisis, and because of government efforts to reduce the number of empty homes. An alternative explanation is that before April 2013 there was an incentive for property owners to report a property as empty, as there was a rebate on council tax for vacant property. And when this incentive was removed, property owners ceased informing the council that their property was empty, and this led to an apparent fall in empty homes reported by official statistics.^[92]

The number of empty homes includes homes where the previous occupier is in prison, in care, in hospital or recently deceased.^[92] The charity Empty Homes argued that empty homes were helping contribute to the housing crisis, saying in a report "The longer a property is empty the more our housing assets are being wasted. Also, the longer a property lies empty, the more likely it is to deteriorate; the more it is likely to cost to bring back into use; and the more it is likely to be seen as a blight by the neighbours."^[92]

In 2016, there were around 200,000 empty homes in the UK, down from 300,000 in 2010.^[91] Empty Dwelling Management Orders (EMDOs) allow councils to take over the management of long-term empty properties but these are generally seen as a last resort and only 43 EDMOs were successful from 2006 to 2011. Government statistics show that long-term empty homes are generally concentrated post-industrial areas, in the North of England and in seaside towns, where property prices are generally lower, with the lowest percentage in London, which had 20,795 long-term empty properties, with the highest in Barrow-in Furness, Burley and Blackburn.^[90][91][93]

As of 2015, around 1.7% of homes in London are empty, which is a historically low level. The vacancy rate is much lower for London's private sector housing compared to the rest of the country, whereas the rates for affordable housing are "broadly similar".^[94] Research by Islington Council revealed that nearly a third of new dwellings built did not have anyone on the electoral register after six years, although this may exclude students and foreign tenants.^[95] The Observer reported on what has been termed 'lights out London' .. 'where absentee owners push up property prices without contributing to the local economy'.^[96] According to a local restaurateur 'my original customers [have sold to ] non-doms who do not live in their [property]. In some apartment blocks 20% were unoccupied... It makes a big difference [to my business]'.^[97]

Research by the London School of Economics for the Mayor of London found that there was almost no evidence of new build units being left empty, "certainly less than 1%" and that the "vast majority" of overseas buyers intended to live in the property or rent it out.^[98]

• Homes England
• Building regulations in the United Kingdom
• Cost of moving in the United Kingdom
• English land law
• HM Land Registry
• Mortgage industry of the United Kingdom
• Public housing in the United Kingdom
• Real estate in the United Kingdom

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