Housing

Restarting housebuilding

This new report series from Centre for Cities, 'Restarting housebuilding,' builds on our 2023 report 'The housebuilding crisis' that found Britain had a backlog of 4.3 million homes missing from the national housing market. Using local-level data from the last 80 years, newly digitised by Centre for Cities, these three new reports focus on Private and Public housebuilding as well as Land Value Capture. Together they offer a comprehensive analysis of the planning reforms needed to meet the new government's housebuilding 1.5 million housebuilding target and deliver the acceleration of private and public housebuilding that the UK need.

The UK’s chronic housing shortage is one of the biggest economic and social challenges the country faces. The Government is aiming to build 1.5 million homes over the Parliament in England, but barely 200,000 were built in 2023-24.

England’s housing crisis is so severe as the planning system is especially restrictive. While other countries have rules-based zoning systems, England has a discretionary planning system where every decision is made case-by case. In most zoning systems proposals that follow the rule are accepted, while under discretion even projects that have been approved by planners can be rejected by councils.

The housing crisis varies substantially across the UK, with the worst shortages in the most economically successful cities and towns where employment opportunities draw in large numbers of people. These are caused by how our planning system disconnects the local supply of housing from local demand.

The UK's housing crisis

Centre for Cities' latest piece of work on housing delves deep into the history of the UK's housing crisis and finds that the UK has a backlog of 4.3 million missing homes.

Where has the worst housing shortages?

Cities with the biggest housing shortages are primarily concentrated in the Greater South East of England such as London and Brighton. But some other prosperous cities like Edinburgh, Bristol, and York that have lots of high-paying jobs are also affected.

Many expensive cities, such as Oxford and Brighton, often build far less housing than cities with cheaper housing and lower demand, such as Wakefield and Telford. This is because the supply of houses has little connection to prices and therefore the cities with the most unaffordable housing.

There is huge variation around where in large cities and towns new homes are being built. The vast majority of development happens either in city centres or on the very edges of cities. Meanwhile, half of all suburban neighbourhoods build less than one home each year.

The housing shortage

The UK doesn’t have a national housing crisis, but there is a housing crisis in our most unaffordable cities. Our work offers ideas on how national and local leaders can get homes built where demand is highest.

Sleepy suburbs

Anthony Breach and Elena Magrini

This report uses new data to examine which neighbourhoods within cities are building the most and the least new homes and explores what this means for policy making.

Report 24 Mar 2020

What are the effects of housing shortages?

Both housing outcomes and the wider economy suffer from housing shortages and a lack of change in the built environment.

Low housebuilding is linked to more expensive and worse quality housing, particularly in and near the most prosperous and expensive cities.

This reduces disposable incomes and prevents people from living and work in the places where they can secure the highest wages and most progression.

The planning system ‘freezes’ large parts of the built form of English cities, so public transport networks are less efficient than they could be. People are prevented from living in walking distance of the network in apartment buildings, reducing the size of local labour markets and the economy.

Why do we have a housing shortage?

The planning systems of the UK cause this shortage of homes by making it difficult to build. They do so in two ways. First, they ban new homes in large parts of the country, especially near cities, with policies like the green belt. Second, the unpredictable, case-by-case design of the planning process also makes it risky to propose building even in places where new homes are not banned.

Planning reform

What changes are needed to get more housing built where it is needed?

What is planning reform and why do we need it?

Planning reform is a package of proposed changes that have the aim of increasing certainty for people applying for planning permission to build new homes and commercial buildings. The discretionary planning system is unusually restrictive and uncertain, and at the root of the housing crisis.

It is possible to distinguish between “small-r” planning reform within the existing planning system, and “Big-R” planning reform that would shift us from the discretionary planning system towards the international norm of a rules-based flexible zoning system.

Since the new Government was elected it has been pursuing a positive “small-r” planning reform agenda, with changes to the National Planning Policy Framework, new and higher targets, green belt release, and new towns.

Other small-r planning reforms the Government could pursue are the implementation of the National Development Management Policies alongside Option 3 of their consultation on planning committee reform. Together they are a significant step towards a rules-based system.

The Government will eventually still need to implement a flexible zoning system if it wants to end the housing crisis. Centre for Cities has previously set out a proposal for planning reform that would replace the current discretionary planning system with a new flexible zoning system. For more details see the Planning Reform FAQ.

How can we build more homes?

The UK must concentrate homebuilding primarily in economically successful cities where demand is highest. The current planning system will not deliver homes at this scale or in the right places. Only a wholescale reform of housing policy will deliver the development needed.

We propose:

  • Increase housing supply where new homes are needed. More homes are built in Wakefield than Oxford. Building in places with fewer jobs won’t fix prosperous cities’ housing crises.
  • Planning reform to introduce a new flexible zoning system that would allow builders to build if they follow the rules, while maintaining special protections for National Parks, Conservation Areas etc.
  • Zoning of land in walkable distances around train stations in the green belt for suburban living and with protected green space, which would provide 1.8 to 2.1 million homes.
  • Increase the use of permitted development rights to cut the red tape that makes it hard to build upward extensions or infill developments.
  • Stop subsidising home ownership. Despite Right to Buy, home ownership as a share of private housing has fallen in every city since 1981. The Government should stop subsidising ownership, tax housing wealth increases by abolishing the Capital Gains Tax exemption for primary residences and treat owning and renting equally.

Showing 1–10 of 191 results.

green fields and houses
The impact of green belt on housebuilding

Xuanru Lin

This blog looks at how the Green Belt impacts the scale and location of housebuilding in England, as well as the potential opportunities for reform, using data from our ‘Restarting Housebuilding’ research series.

Blog Post 29 Jan 2025
Restarting housebuilding
City Minutes
City Minutes: Restarting housebuilding

Series: City Minutes

Chief Executive Andrew Carter is joined by Ant Breach, Associate Director and Maurice Lange, Analyst to discuss the findings of our new report series ‘Restarting housebuilding’ that looks at...

Podcast 12 Dec 2024
Restarting housebuilding: Five key takeaways

Anthony Breach and Maurice Lange

The UK has a shortfall of 4.3 million houses compared to other Western European countries. This housing shortage has reduced affordability, growth, and living standards.  The Government...

Blog Post 12 Dec 2024