UK housing is at a crisis point. Skyrocketing costs, inadequate supply, and misaligned incentives have created a perfect storm that impacts every aspect of our society – from individual aspiration to national economic growth. The Government has won a landslide on the promise to build more homes and end this crisis. On Wednesday we released a report with the Tony Blair Institute that outlines achievable solutions to tackle these deep-rooted issues head-on, offering practical steps to transform Britain’s housing landscape.
The statistics paint a stark picture. Housing costs in the UK now absorb a larger fraction of consumption than in any OECD country except Finland. Much of the vast quantity of investment in property is in the land and planning consents rather than the quality of the buildings. We have invested less per head in the physical fabric of our built environment than any other high-income Western country. British people live in the cheapest physical structures of any advanced nation. This means that despite high costs, British homes have worse value than other OECD nations for size, energy efficiency and build quality.1
The average house price has soared to nine times average earnings, making homeownership a distant dream for many. For low to middle-income earners, the time required to save for a deposit has ballooned from three years in the 1990s to over 22 years by 2022.
But this crisis extends far beyond individual struggles to buy or rent a home. It’s choking economic growth, limiting opportunity, and exacerbating inequality. Of the 4.3 million new homes added in England and Wales between 2001-2023, only 21% were in the 12 cities with the highest average wages – a clear mismatch between housing supply and economic opportunity.
At the heart of our report are the necessary measures to deliver homes. This isn’t just about increasing numbers – it’s about building homes in the right places to give people a better quality of life, drive economic growth and improve access to economic opportunity.
The Government has a once in a generation opportunity to fix this crisis. In the report we recommend a three-pronged approach:
- Strategic planning of new urban extensions and regeneration: We must prioritise development in areas where it will deliver the strongest economic benefits. This approach maximises the impact of new housing, creating vibrant communities with access to jobs and opportunities.
- A renewed focus on social housing: We’re calling for 700,000 new council homes. This isn’t just about providing affordable housing – it’s about creating stable communities and reducing the supply pressures in the private rental sector.
- Enabling “gentle density” in cities: By allowing for modest increases in urban density, we can make better use of existing infrastructure, create more sustainable neighbourhoods, and reduce commute times.
Achieving the Government’s ambitious goals requires a fundamental overhaul of our planning system. Our well intentioned, but overly complex system focuses on process rather than outcomes. The rules have prevented new homes, raising housing costs and choking growth. Planning should be streamlined and local government should be given more powers to enable growth, not block it. Better value capture and more power for Metro Mayors could deliver new council homes, improved public transport and better public services. Labour’s focus on planning during the election must be matched by delivery.
This is a moment that calls for action and vision. The current Government won a mandate on building more homes and infrastructure. The country must seize this opportunity to build a system that works for everyone – delivering affordable homes, stronger communities, and laying the foundation for sustained economic growth. Our report outlines the steps that the Government can make to get Britain building:
Header image: Social housing at Sandpit Place, London. Reproduced by kind permission of Morley von Sternberg
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