House building is failing to keep pace with population growth in Britain’s fastest growing towns and cities, research from property P2P lender BLEND Network has revealed.
BLEND Network’s analysis of official data for UK house building and population growth shows Belfast is the UK’s fastest growing city. The Northern Irish capital’s population increased by 21%, or 59,989, from 280,211 in 2011 to 340,200 in 2017. Over the same period however just 4,220 new houses were completed in the city equating to one new home for every 14 new inhabitants.
Coventry is the UK’s second fastest growing city. Its population increased by 13.6% between 2011 and 2017 from 316,900 to 360,100, an increase of 43,200 people. But house building in the city has lagged behind with just 5,460 new properties completed over the same period equating to one new home for every eight new inhabitants. The city has seen house prices increase by 44% over the same six years.
Meanwhile, although the population of Birmingham has only increased by 64,200, or 6%, between 2011 and 2017, house building has entirely failed to keep pace with only 5,650 homes completed in the same six years equal to one property per 11 new residents. House prices in the UK’s second largest city have risen by 34% in the same period.
The city of Manchester was the sixth fastest growing city in the UK, its population increased by 42,400, or 8.43%, from 503,100 in 2011 to 545,500 in 2017. But the total number of houses of built in the city over the same period of time was just 6,360 or one new home for every 7 new residents. As a result, property values have rocketed 48% in six years.
Brighton meanwhile saw its population increase by 14,900, or 5.45%, from 273,300 in 2011 to 288,200 in 2017 but the total number of houses built in the town in the same period rose by only 1,070. As a result, the town built one house to accommodate every 14 new residents. The coastal town saw property values leap 49% between 2011 and 2017.
Surprisingly, the population of London was the 11th fastest growing in the UK, seeing an increase of 651,000 between 2011 and 2017 taking the total population of the capital from 8.1m to 8.8m, a rise of 8%. But there were also 146,000 housing completions over the period equal to one house per 4 new residents. Despite this property values in the capital still increased by 66.
The town which saw the largest increase in property values was Slough, where house prices increased by 68% between 2011 and 2017. Over the same period just 1,920 new properties were built while the population increased by 8,600, giving a ratio of one new home per 4 new residents.
BLEND Network analysed the population growth and house building statistics of 100 towns and cities across the UK, using Office for National Statistics and official government housing data. The figures paint a stark picture of the parlous state of the UK’s property market and the lack of house building in the UK overall, eight months after Prime Minister Theresa May called the lack of housing in the UK as the biggest domestic policy challenge of our generation in her Conservative Party Conference speech. Current estimates suggest the UK as a whole needs to build 300,000 new homes each year in order to combat the housing crisis.
Elsewhere in the UK, house building in the Welsh capital, Cardiff, was just about keeping pace with population growth. Its population increased by 11,200, or 3%, from 346,000 in 2011 to 357,200 in 2017. Over the same period 3,629 new homes were completed equalling one new home for every 3 new residents.
House building in the Scottish capital, Edinburgh, was also keeping pace with its expanding populace which increased by 4065, or 1%, from 477, 940 in 2011 to 482,005 in 2017. Over the same period Edinburgh saw 11,107 new houses completed equal to three new homes per new city resident.
Of the towns and cities studied by BLEND, two saw their populations decline. Scarborough’s population fell by 300 people between 2011 and 2017 but the town built 1980 homes over the same period while Blackpool’s population declined by 2,100, or 1.5%. Finally, the greatest anomaly thrown up by the study found that house prices in Cambridge increased by an extraordinary 62% despite the city’s population increasing by less than 1%. Over the six years analysed Cambridge built 4,420 equivalent to just over four homes per new resident.
ONS data estimates there are on average 2.4 people per household in the UK. On this basis, of the 100 towns and cities analysed by BLEND Network, less than half were building enough homes to keep pace with population growth.
Yann Murciano, Chief Executive at BLEND Network, commented: “That there is a housing crisis in the UK is well recognised and beyond dispute but the extent of the crisis we are facing has been laid bare by examining this data. What’s also troubling is that we may not be building homes in the right places.
“There is clearly a need for greater house building in Belfast, Manchester, Coventry and Birmingham for instance, but perhaps less so in cities like Glasgow, Swansea or Sunderland. Given how much is made of property values in London and the link between high house prices and a lack of property, it is perhaps surprising that the data suggests there is less of a chronic under-supply of housing than would be believed.
“Obviously, property developers can only build housing where it is needed with financial support but often struggle to raise enough funds from traditional lenders. BLEND Network works specifically with property developers offering loans from as little as £150,000 to £3m for development finance projects across the UK to help provide affordable housing in the places it is needed most.”
Roxanna Mohammadian-Molina, Chief Strategy Office at BLEND Network, commented: “When we launched BLEND Network we did so with the intention of trying to help alleviate the housing crisis in the UK. To that end we work with property developers that build low-cost housing across the whole of Britain and Northern Ireland, while providing investors with returns of between 8% and 15% per annum.
“But the scale of the current UK housing crisis means there is far more work that needs to be done otherwise house prices will remain affordable, and for many, the dream of home ownership may never be realised.”