Four million UK homes missing due to outdated planning laws

Compared to other European countries, Britain has a backlog of millions of homes that are missing from the housing market. Building these homes is key to solving the nation's housing crisis.

Press release published on 22 February 2023

  • Inefficient post-war planning rules have prevented 4.3 million homes from being built since 1955, compared to European averages.
  • Housing backlog would take at least 50 years to fill even if current housebuilding targets are met.
  • Tackling housing crisis must include delivering planning reform with new zone-based system.

Millions of homes are missing from the UK’s housing market as a result of the country’s inefficient and outdated planning laws, a new report by Centre for Cities has found.

The current case-by-case planning process based on the 1947 Town and Country Planning Act has encouraged an unpredictable system that has continued to hamper housebuilding over recent decades.

In a new report entitled The Housebuilding Crisis, Centre for Cities highlights how these laws have seen UK housebuilding rates drop significantly below European averages over the last 70 years, creating a backlog of at least 4.3 million homes that could have been built since the 1950s.

This housing deficit would take at least half a century to fill even if the Government’s current target to build 300,000 homes a year is reached. Tackling the problem sooner would require 442,000 homes per year over the next 25 years or 654,000 per year over the next decade in England alone.

Planning in the UK provides local authorities with an unusually high level of discretion, which consequentially puts restrictions on development. This means that instead of the planning system allowing all development that follows the rules, it is possible for developers to adhere to local plans and still have their application rejected.

Over the last 70 years, the UK has seen a massive drop in its housing availability in comparison to most other European countries, which tend to have more certain and efficient planning systems. While the number of dwellings per person in Britain was 5 per cent above the European average in 1955, figures from 2015 show it has since plummeted to at least 8 per cent below the average.

Housebuilding rates in England and Wales have dropped by more than a third after the introduction of the Town and Country Planning Act 1947, from 2 per cent growth per year between 1856 and 1939 to 1.2 per cent between 1947 and 2019.

This has been a key factor behind the UK’s long-standing housing crisis, which has led to inflated property prices and soaring rents in recent decades.

To deliver any significant increase in housing, the Government will need to enact planning reform. This should include a shift from the current discretionary system towards a rules-based, flexible zoning process – much more like the best-performing European countries. This would ensure there was more land available for new homes, thereby making higher-quality housing more affordable.

Centre for Cities Chief Executive Andrew Carter said:

“This research shows that UK planning policy has held back the economy for nearly three quarters of a century, stifling growth and exacerbating a housing crisis that has blighted the country for decades.

“Big problems require big solutions and if the Government is to clear its backlog of unbuilt homes, it must first deliver planning reform. Failure to do this will only continue to limit England’s housebuilding potential and prevent millions from getting on the property ladder.”

Notes to editors

Ending the housing crisis requires replacing the Town and Country 1947 planning system of England (and the devolved nations) with a new flexible zoning system that would have:

  • A flexible zoning code designed by national and devolved governments for local governments to use in local plans, with a small number of different mixed-use zones corresponding to different types of neighbourhood. For example, skyscrapers would be suitable in a city centre zone and polluting industrial activity in industrial zones, but neither would be allowed alongside homes and light commercial uses in a suburban living zone.
  • Rules stating that planning proposals which comply with a zone-based local plan and building regulations must be granted planning permission.
  • Local Plans and Local Transport Plans – which are currently different documents – should be merged into the same document, so that planning for development requires planning for infrastructure and vice versa.
  • Better organised and frontloaded public consultation in the creation of the local plan, rather than individual proposals.
  • Phasing of non-developed land into zoned areas, depending on local population growth, affordability, and vacancy rates.
  • 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.64
  • Replacing negotiated ‘developer contributions’ towards local government with a flat levy on a development’s value for infrastructure and new social housing.
  • Maintaining opt outs and special designations where case-by-case decisions continue, such as conservation areas, listed buildings, national parks, and wildlife reserves to protect environmentally or architecturally precious land.
  • Creating ‘safety-valves’ in the system that allow alternative pathways for development, such as the Street Votes or Builder’s Remedy proposals.

About Centre for Cities

  • Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities.
  • We are a charity that works with cities, business, and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange.

More on these issues