The UK has a housing shortage of 6.5 million homes when compared to similar countries in Europe, analysis from a think tank found.
Research from the Centre for Policy Studies (CPS) showed that there were just 446 homes for every 1,000 people in Britain, the second-worst rate in Europe. By comparison, there are 560 homes for every 1,000 people in France, 516 in Germany, and the European average is 542.
It found that based on recent trends, the UK will not reach the current European average of 542 homes per 1,000 people until 2115.
It is only in Ireland where the ratio of people to homes is lower than the UK average, with 411 homes per 1,000 people.
The CPS’ analysis found that the housing shortage was concentrated in England, where there were 440 homes per 1,000 people, the lowest rate out of all four nations.
Of the 6.5 million homes the CPS said were missing from the UK, 5.85 million were in England.
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Within England, the fewest homes per capita were in London at a rate of 427 homes, suggesting a shortage of 1.1 million dwellings. It said this only accounted for the current population of the English capital and not the people who wanted to live in London but were priced out.
Underbuilding leading to housing shortage
The CPS attributed the housing shortage to the lack of development in the UK.
It compared England to France, where the housing stock in the latter has risen by around 1.1% every year for four decades. By contrast, England has only increased its housing stock by around 0.8% each year over the same period.
The CPS said if England matched the housing delivery of France, it would have built 2.9 million more homes or an additional 50 homes per 1,000 people, which would close around half of the housing gap.
Immigration is a minor factor
The analysis suggested that immigration had not caused the housing shortage, but had not made the situation better. It found that when immigration to England peaked between 2021 and 2023, the number of homes per capita fell despite the delivery of 470,000 homes in that period.
It said if migration had stayed in the tens of thousands since 1997 and the delivery of homes remained the same, England would have 475 homes per 1,000 people, an improvement on the current 440. However, this would only cover a third of the housing shortage and leave England as the third-worst country for housing per capita in Europe.
More homes mean lower prices
Further, the analysis deduced that countries with more homes per capita had lower house prices, suggesting that the shortage made housing unaffordable.
It calculated that adding one home per 1,000 people lowered average house prices per square metre by £7.95, and suggested that if the UK resolved the housing shortage, prices would fall by around £800 per square metre. For an average house size of 92 square metres, this would represent a £75,000 fall in property prices.
A wake-up call
Ben Hopkinson, head of housing and infrastructure at the CPS, said: “These 6.5 million missing homes should be a wake-up call to policymakers from across the political spectrum. Failure to build more homes means British people, especially those in England, are being condemned to smaller, more expensive houses than our European neighbours. Workers are priced out of our most productive cities, and couples are unable to have the families they desire.
“It is possible to eliminate the shortage, boost wages, increase disposable income, and make the UK a fairer country generationally and regionally, but we need dramatic changes to our policies on planning, housebuilding, and immigration. The solutions are within reach – politicians just need to show their commitment to truly addressing the scale of the problem.”