Britain needs to build the right houses in the right places
Date: 10/07/2008A new report from the Centre for Cities calls on the government to deliver on its pledge to build 3 million new homes by 2020, by tailoring new housing to the needs of city economies. Only by building from accurate assessments of local housing markets will the government deliver the homes Britain's economy needs.
Taking a uniform national approach to the government's "3 million homes" target, and simply increasing the overall supply of housing, will not fix the wide range of economic challenges faced by Britain's towns and cities. Houses need to be built in response to the economic needs of individual cities - some (such as Cambridge or Bristol) have problems with affordability and supply, but others (eg Hull, Sunderland and Bradford) need to focus on widening the range of private housing on offer to local people.
Today's report, Home Economics: How Housing Shapes City Economies, recommends that cities should plan new housing supply based on a better understanding of the demand from local people. Local authorities should collaborate across boundaries to address ‘real' economic areas, rather than working in isolation. And cities should work together with local employers and house-builders, to make sure that the right houses are built in the right places.
The report identifies two types of cities at either end of the spectrum - those which need more houses, and those which need better houses.
In many cities, houses are too expensive...
In cities with thriving economies, such as Cambridge or Bristol, many people can't afford to get onto the housing ladder - and prices will need to fall further than currently predicted to improve the situation. A nurse living in Cambridge earning £18,500 would need to invest eleven times their salary to afford even an "affordable" house in the area (compared to a national average of 7.25 times). More than two-thirds of Cambridge's working-age population are unable to buy their own home - and the city faces skills shortages in professions such as nursing and teaching as a result.
... but in others, they're not of the right size and type...
But cities with smaller economies, such as Sunderland or Bradford, have an opposite problem, with too few homes of the size and type to tempt high-skilled workers into the area. Over three-quarters of houses in Sunderland are in the lowest two Council Tax bands - and only 0.5% are at the top end of the scale. Lawyers, middle managers and doctors are moving out because of a limited choice of housing.
Dermot Finch, director of the Centre for Cities, said: "If we want to see the right houses in the right places, ‘build, build, build' isn't always the answer. It's not enough to talk about the big 3 million target - politicians from both central and local government need to understand where in Britain's jigsaw of local economies new houses should be built. It's time for cities to develop a far deeper understanding of local housing markets."
Simon Rubinsohn, Chief Economist at the Royal Institution of Chartered Surveyors (RICS), said: "It is essential that housebuilding does not completely dry up as a result of the current economic conditions. Rather than simply looking at delivering a number of units, housebuilding needs to be tailored to respond to local demand and housing need. Innovative solutions are needed to give people the homes they want, including greater use of the private rented sector and a wider role for schemes such as rent to buy. If these steps are not taken we will be faced with serious supply and affordability problems when the market conditions become more favourable."
Bob Bond, Chief Executive, Rydon Group, said: "Private developers are normally quite good at building housing that is aligned to market forces. Where there is still an opportunity for improvement is where private, affordable rent and intermediate housing all come together under public sector sponsored initiatives. In these cases all parties need to understand how the type and mix of housing relates to the economy of the locality, so that property developments become a catalyst for progress whilst also helping to meet the statistical need for more housing. Understanding local issues is central to Rydon's business and over the years we have worked with our partners to deliver many successful mixed tenure schemes. I hope the report encourages a debate and helps to create an environment that allows us all to do even better."
The report makes recommendations for local authorities and the government's new Homes and Communities Agency:
- Cities should plan new house-building based on a better understanding of local demand.
- Local authorities should collaborate across real housing markets, and not work in isolation.
- In cities where there is high demand for housing (such as Cambridge and Bristol), cities should encourage a bigger and better private rental sector.
- In cities where there is lower demand (such as Bradford and Hull), the focus will need to be on quality of place improvements and re-balancing local housing markets.
Notes to Editors
Home Economics: How Housing Shapes City Economies by Kenneth Gibb, Tony O'Sullivan and Catherine Glossop is available at www.centreforcities.org/homeeconomics
For more information, please contact:
Rosamund Taylor, Media and Communications Officer, Centre for Cities
r.taylor@centreforcities.org / 020 7803 4316 / 07876 175 426
