Why It Matters
Housing Supply
Summary
We have measured the amount and origin (private enterprises, housing association, Local Authority) of completed housing units in a selected postcode, and forecasted, based on the number of houses built in the area over time, the expected number of housing units over the coming years.
Definition
| Dataset | Explanation |
|---|---|
| Postcode number of dwellings by private enterprises | Counts the total number of homes built by private enterprises in your selected postcode. |
| Borough number of completed dwellings by private enterprises | Counts the total number of homes built by private enterprises in your selected borough. |
| Postcode number of dwellings by housing associations | Counts the total number of homes built by housing associations in your selected postcode. |
| Borough number of completed dwellings by housing associations | Counts the total number of homes built by housing associations in your selected borough. |
| Postcode number of dwellings by Local Authorities | Counts the total number of homes built by Local Authorities in your selected postcode. |
| Borough number of completed dwellings by Local Authorities | Counts the total number of homes built by Local Authorities in your selected borough. |
| Borough 3 year moving average of completed dwellings by private enterprises | Forecasts our predicted number of homes that will be built over the next 3 years by private enterprises in your selected borough. |
| Borough 3 year moving average of completed dwellings by housing associations | Forecasts our predicted number of homes that will be built over the next 3 years by housing associations in your selected borough. |
| Borough 3 year moving average of completed dwellings by Local Authorities | Forecasts our predicted number of homes that will be built over the next 3 years by Local Authorities in your selected borough. |
| Postcode total number of completed dwellings | Counts the combined total number of homes in your postcode |
| Harmonised score of completed dwellings | A relative score out of 100 which ordinally scales a postcode’s number of homes. A score of one indicates the lowest supply of homes available in London whilst a score of 100 indicates the highest. |
| Harmonised Score Quartile of completed dwellings | Shows which quartile a selected postcode’s housing supply falls within. |
Why the metric matters from commercial inhabitant’s perspective?
Having an understanding of the housing supply of an area is important for commercial inhabitants as it provides them with a knowledge of roughly how many potential customers they will have in their neighbourhood. Given the population density of London, it figures that more housing supply means more people living in an area, and thus more people who may visit your business. The metric also forecasts, based on current supply trends, the likely increase in supply in that given area over the next three years. This allows businesses to forecast any potential rise in local customer base to a good degree of accuracy and track the areas that may be on the rise.
Furthermore, having a high number of rented properties nearby may indicate the possibility that potential customers would be more likely to move on after their rental tenure is up and therefor it may be hard to ingratiate yourself within a steady community.
A higher proportion of those in socially rented accommodation would mean that the community would likely be more robust and would be there for much longer as social tenants tend to remain in their home for a greater period of tenure than private renters. However it may also mean that community-based shops are already present in the area as many social housing schemes were constructed with shopping space included in the design, and it will also imply a greater likelihood that local prospective customers would be of a lower income. There is also a higher chance that development will take place in areas with high levels of social housing.
Those who own their homes either outright or with a mortgage will again likely be around for a long time, giving you a secure customer base. Particularly places with lots of outright ownership, but mortgage based ownership too, will indicate a higher income community and therefore commercial inhabitants may wish to cater to that demographic.
For a property-related business or for a company who wishes to develop in the area it is also very important to know the housing supply, mainly so as to know what is already there that you may have to compete with, how amenable an area may be to an increase in housing supply, but also how many homes may be disrupted in the event of a large-scale project.
Why the metric matters from the residential inhabitant’s perspective?
Knowing the housing supply in a selected postcode is important as a higher supply and supply prediction over the coming years may indicate an area on the rise and the demand for that area will be increasing. This can of course have an impact on the house prices in the area.
A large number of houses in a single postcode may also indicate a likelihood of better amenities such as supermarkets, nightlife, or transport infrastructure, though this will be best investigated by using our other metrics alongside this one. However, if there’s a forecast for a large number of new residential units this may suggest that certain amenities like green space may suffer as a result of finding room for all of these homes.
Residential inhabitants would mainly be interested in the types of tenure around them so that they can get an idea of what tenures of housing would be available to them were they to move there. The more of one would suggest a higher likelihood that that would be the most likely tenure on offer in that selected postcode or wider area.
It would also indicate the likely income level of the local area in much the same way it would for the commercial inhabitant, and therefore would perhaps provide some insight into the potential house prices in the area, though we have more accurate metrics to predict that.
For potential investors or those looking to buy to let this may also prove of interest if there are a lot of owned homes amongst a large amount of privately rented properties.
General Commentary
It’s generally agreed upon that Britain’s housing supply is not meeting the demand of the country’s growing population, particularly in the supply of affordable and socially rented homes. Reports suggest that many housebuilders aren’t adequately catering to much of the population thanks in part to the reduction in government-subsidised housebuilding, and falling stock levels of sub-market rental housing due to Right to Buy. There are also some developers failing to target those in need of housing and a lack of incentive to do so, landbanking, low density housing, and, more broadly, a lack of policy to support housebuilding in some areas and perhaps too stringent policy to prevent it in others.
The London Plan, set out by the GLA, suggests that the city needs 52,000 homes completed per year to support the population increase, but only 43,000 are forecast per year for the period 2021-25, resulting in a 36,000 shortfall over just 4 years. Savills estimate that London actually needs 90-100,000 new homes per year, 42,500 of which must be sub-market or affordable in order to meet demand, rather than the 7,900 sub-market homes built annually, and say that the need for affordable housing in London is 7.6 times higher than the supply.
Trivia
Across the country, households are predicted to increase by over 230,000 per annum, but housebuilding is struggling to breach 150,000, and there are nearly 5 million households living in unsuitable accommodation.
History
Throughout much of urban history, housing supply has been the domain either of the individual or the landowner, the latter of whom would either organise the building of homes and charge rent on the property, or allow the individual to build a home on their land and charge rent on the ground it was built on. The lack of building codes at the time meant this housing was often of poor standard.
As the Industrial Revolution arrived, mass migration to London forced a need for a rapid supply of housing. Landowners or landlords built and purchased a huge amount of houses in the early-to-mid-19th century, and it wasn’t long before more than 90% of the country’s residents were renting their homes. Slums quickly developed as private builders looked to profit off desperate Londoners priced out of other areas or arriving in the city for the first time. The Local Government Act of 1858 stipulated terraced streets must be 11m wide and all houses must have a garden of 14 square metres.
Around this time Housing Associations such as Peabody and Guinness also emerged as philanthropic organisations to provide affordable housing for the growing lower and lower-middle classes, while the first social housing projects were being created in the form of Tower Hamlets council’s Boundary Estate and Westminster’s Millbank Estate.
In 1918 the Tudor Walters Report set out standards for social housing and in 1919 the Housing and Town Planning Act, or the Addison Act, was implemented by the government of David Lloyd George to house Britain’s ‘heroes’ following the First World War. These acts expanded government-built housing controlled by the LCC, growing the country’s housing stock from 7.5 million in 1911 to 11.3 million by 1939, and buying up existing stock and renting it socially. Well-built, spacious and sanitary flats with indoor bathrooms and running water were built in estates in urban centres in place of slums, and the suburbs saw the growth of the quintessential three-bed semi.
After the Second World War and the Blitz, which had destroyed more than 500,000 homes, housing was in a terrible shortage, as were those to build and design it. Housing became a priority in election campaigns as a matter of public health. Millions of homes were completed over the next decade and into the 1950s high rise architecture became fashionable and a good way of housing many in a small area. 500,000 new homes were added to London by the ’60s in the form of high density blocks.