The issue of housing has moved up the national agenda – but there is no one, single housing crisis. The affordability of housing varies massively between cities, as shortages of new homes are a local, urban phenomenon determined by the strength of the local economy.
In 2018, the national average affordability ratio4 was 8.4; in Oxford, this ratio was 17.3, over four times higher than the same ratio in Burnley of 4.3, where housing is much more affordable. There are also large differences between average rents as well as house prices.
The shortage of homes is linked to how our planning system restricts development by using planning permissions to control the market for land. This and the inequalities it creates between and within cities has been highlighted in previous Centre for Cities research.5 These restrictive planning requirements decouple supply from demand meaning that the housing supply often grows faster in inexpensive cities like Telford and Mansfield but slower in more expensive cities such as Southend and Oxford where increases in the number of houses are more needed.
At a recent Select Committee evidence session, Robert Jenrick, the Secretary of State for Housing, Communities and Local Government (MHCLG) re-iterated proposals to allow for the upward extension of buildings without the need for planning permission.6 Those wishing to extend their homes would be able to build upwards by one or two floors without planning permission under PDR. PDR is an automatic grant of planning permission that allows householders to improve and extend their homes without the need to make a planning application. PDR would be granted under the new proposals providing that extensions are carried out safely and to a high standard in keeping with the architecture and design of a street.
This proposed expansion of PDR would follow on from the previous expansion of PDR in 2013 which allowed for office to residential conversions without planning permission. The current PDR system which included office to residential conversions has resulted in over 31,800 additional homes being built in England and Wales between 2015 and 2018.7
This report examines the cities which have the most demand for additional space, and where PDR saw the largest take-up previously to see where an expansion of PDR to include upwards extensions and other ways of delivering new floorspace would have the greatest impact on local housing shortages.
Box 1: Data
The data used in this report is mostly drawn from building energy performance data8 included in the domestic register when Energy Performance Certificates (EPCs) are collected in England and Wales.
EPCs are required for any newly-built (post-2011) properties as well as for any other building where a transaction has taken place. This includes marketed and non-marketed sales and rentals but does not include any information on houses which have since been withdrawn from the market such as short-term lets, Airbnb lettings or extensions to properties.
When EPCs are collected, one measure is the total floor space in a dwelling. Data on over 18 million dwellings is recorded in the EPC domestic register, which represents around 70 per cent of all dwellings in England and Wales.
This report combines this information with data on the number of households, dwellings and populations, drawn primarily from the 2011 Census,9 as well as data released by MHCLG.