Housing outcomes in the UK improved considerably over the course of the 20th century. Space per person and the quality of stock both rose as incomes increased, transport technology enabled longer commutes from cheaper land, and demographic change caused households to shrink.
How people lived changed too. At the start of the 20th century, 90 per cent of people were private renters. After the end of the post-war period in 1981, only 11 per cent of people were private renters, 57 per cent were homeowners, and a third of people were in social housing.1
Today though, there is a severe housing crisis in Britain, especially in the most prosperous places in the Greater South East. Across England, the average house costs more than ten times the average salary, vacancy rates are below 1 per cent, and space per person for private renters dropped from 34m2 in 1996 to 29m2 in 2018, and from 31m2 to 25m2 in London.2
There is a consensus that Britain has a housing crisis due to a shortage of new homes. The current government has a notional aspiration to address this by enabling 300,000 homes a year in England but has struggled to achieve more than 240,000 since 2018 – itself the highest rate of construction since the Financial Crisis in 2008.
Much of this is well-known. There are though two competing explanations for the housing shortage:
- The discretionary planning system established by the Town and Country Planning Act 1947,3 which is argued to have introduced an unpredictable case-by-case decision-making process that has reduced development.4
- The decline of Postwar Britain’s extensive council housebuilding programme from the 1980s.5 From 1945, councils built roughly half of all new homes until the introduction of Right to Buy for council tenants in 1980. As private housebuilding did not increase after 1980, it is argued recent lows in housebuilding are due to the lack of new council housing.
Both accounts have some truth to them. The decline of council housebuilding is part of why total housebuilding fell at the end of the post-war period, and the planning system does reduce new construction today.
However, the two explanations do differ on the root cause of the housing shortage and on priorities for reform. The core of the disagreement is whether planning reform or policy to encourage a resurgence in council housebuilding will provide the bigger and more permanent increase to housebuilding required to end modern Britain’s housing crisis.
As both the planning system and mass council housebuilding were introduced shortly after the Second World War, and the former persisted after Right to Buy in 1980, these competing accounts can be investigated by comparing housing in Britain in the post-war period of 1947 to 1979 to other periods and to other Western European countries. To determine whether the planning system is the primary cause of the housing crisis, we test the first two hypotheses of the report:
Hypothesis 1: English and Welsh housebuilding rates began to decline after 1947, not 1980
If the planning system is to blame for the England’s housing shortage, then after the introduction of the Town and Country Planning Act 1947 total housebuilding should fall, even if council housebuilding is higher than before 1947. If the decline of council housebuilding is primarily responsible for today’s crisis, then housebuilding should only deteriorate from 1980.
Hypothesis 2: British housebuilding rates and housing outcomes of the post-war period between 1947 and 1980 were worse than those of similar European countries
If the planning system is responsible for the UK’s housing shortage, then housebuilding rates and housing outcomes in Postwar Britain from 1947 to 1979 should be lower than those in other similar European countries. If the decline of council housebuilding is primarily responsible, then British housebuilding rates and housing outcomes should be similar to peer European countries until 1980, after which both should deteriorate.
If the two hypotheses are tested and the deficit in total housebuilding begins during the post-war period between 1947 and 1979, then one potential response could be that Postwar Britain failed to build enough council housing. To test this response, a third and a fourth hypothesis on post-war housing emerge:
Hypothesis 3: The rate of British council housebuilding in Postwar Britain did not fall below public housebuilding in other countries pursuing mixed-tenure strategies.
If an undersupply of council housing in the post-war period was behind the UK’s unusually poor housing outcomes today, then council housebuilding should have been lower or experienced a decline unusual compared to other countries in the post-war period that had a large role for public housebuilding.
Hypothesis 4: The private sector housebuilding rate did not increase as policy shifted towards private ownership towards the end of the post-war period.
If the planning system was not imposing barriers on new construction, then private sector housebuilding should have increased or at least remained stable as policy shifted towards supporting private housebuilding in the post-war period.
Using data from the United Nations, it is now possible to compare the outcomes of British housing policy from 1948 through to 2000 against twelve other Western European countries and test the four hypotheses.
This data includes statistics for these Western European countries on general build rates, housing stock and tenure of houses built. This data previously only existed in statistical annals, but after scanning the books and using OCR technology to assemble the photographed tables into spreadsheets, Centre for Cities has built a digitised dataset that is used in this paper.
The report proceeds as follows:
Section 2 tests the first hypothesis by investigating historical English and Welsh housing supply through as long a time horizon as possible – housebuilding rates back to 1856.
Section 3 tests the second hypothesis by using the United Nations data to investigate whether the United Kingdom’s post-war housing outcomes were typical of Western European countries from 1955 through to 1979.
Section 4 tests the third and the fourth hypotheses by comparing housing policy across the tenures between Britain and other European countries in the post-war period from 1955 to 1979 and investigating housing demand in England from 1960 to 2015.
Section 5 then briefly reviews how housing outcomes and policy have both changed in Britain and Europe since 1980 through to the present, after Right to Buy and the decline of council housebuilding in the UK.
Section 6 compares the total amount of new homes built in the UK from 1955 to 2015 to other Western European countries to calculate Britain’s backlog of unbuilt homes relative to its European peers, and both when and under which tenure (social housing or private) that backlog was accumulated in the decades since the Second World War.
And in Section 7, the paper concludes with some reflections on the results, lessons for modern British housing policy, and the economic history of Postwar Britain.
The appendix includes tables summarising housebuilding rates in the UK over the periods studied. A separate technical annex includes full explanations of the methodology used for interpolation of missing datapoints in the United Nations data and the methodology used to calculate Britain’s backlog of missing homes.
Box 1 defines the periods and geographies used to structure this report and the comparisons of all subsequent data. The report adjusts the periods (e.g. starting the time series at 1948 or 1955) and the geographies (e.g. using England and Wales rather than the UK) for different parts of the analysis to provide comparisons as complete as data constraints allow.
Box 1: Definitions
This report uses specific terms to refer to distinct periods in British and European history and to allow comparisons between them.
Post-war: The period between 1947 and 1979, that ended with the election of the first Thatcher Government. Most of the international evidence from the United Nations on the post-war period begins in 1955 due to data limitations from other European countries – when comparisons are possible with individual countries from 1948, this is done so and noted.
Post-1980: The period between 1980 and 2019. The international evidence – collected from the United Nations before 2000 and from associated national statistical agencies after 2000 – concludes in 2015 due to data limitations.
Interwar: The period between 1920 and 1939. Only English and Welsh data combined is available on housebuilding before this period.
The geographies used by the report also differ due to variations in data availability.
England: Used in Section 3 to analyse house prices and wages from 1960 to 2015, and in Section 6 to provide estimates on changes to England’s housebuilding target from the current 300,000 figure.
England and Wales: Used in Section 1 to analyse housebuilding from 1856 to 2019. Wales cannot be separated from this data before 2001.
United Kingdom: Used in Sections 2, 3, 4, 5 and 6 to compare housebuilding rates, housing outcomes, and the backlog of missing homes to other European countries. ‘Britain’ is sometimes used in this report to refer to the entire UK, as in the conventional historical term of ‘Postwar Britain’.