Figures That Don't Add Up

Please don’t get me wrong. I would like to see more new homes built.

But is it time to abandon one of the property industry’s greatest PR triumphs - the never-ending claim that there is a specific overall number of new homes which SHOULD be built, inevitably far greater than the number of homes that actually ARE built?

The Home Builders’ Federation has been highly successful at persuading the public, politicians and journalists that there is a permanent housing shortfall.

Back in 2003 it issued a press release saying “the discrepancy between household growth and housing completions is worsening at a rate of 50,000 a year”.

In 2006 another HBF release said: “The supply of new housing is as a result falling short of needs by some 50,000 each year.”

A few weeks ago, the HBF produced this, in response to the news that 102,570 new homes were completed in 2010: “Household formation projections show that 232,000 new homes need to be built in England each year to 2030 to meet demand.”

The picture is clear. Whatever the party in government, whatever the planning regime in force, whatever the condition of the housing market, whether the wider economy is in boom or bust, there are too few homes being built.

I’m not one to let politicians off the hook but in a free market for homes, with the planning system moving from heavily interventionist to today’s scrapping of regional plans, does some of the responsibility for too few homes being built not lie with builders themselves?

Dare it be said that by developers ensuring the number of homes built perennially drop below the apparent need, prices are kept high?

One suspects the decade-long campaign by the HBF may be backfiring. Genuine homelessness and government figures on overcrowding have risen but are nowhere near the level of the ‘new homes shortfall’ claimed by the HBF.

So therefore most ‘new households’ live somewhere without buying a new home - perhaps with their parents, by sharing with friends or, of course, by renting in existing homes.

Whatever they are doing, they are existing without new homes. Meanwhile developers continue to offer incentives to shift stock which remains unsold, despite the apparent “pent up demand” which we are told exists all around us.

As I say, I’m sure there is a need for more new homes. I’m less sure whether the way to convince everyone else is by reciting a mantra of figures which now appear pickled in aspic, rather than rooted in reality.

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