Even the fastest growing towns and cities are building as few as one new home for every 23 new residents, research revealed. Contributor Ross Andrews, director of Minerva Lending.
Development in Britain’s ten fastest growing towns and cities cannot keep pace with their expanding populations, according to a new analysis by Minerva Lending PLC, a listed property bond, which provides loans used by developers to convert offices into homes.
Belfast tops the list of the UK’s fastest growing towns and cities but is building the fewest new homes relative to population growth, according to the study of Office for National Statistics (ONS) figures. The Northern Irish capital is creating just one new home for every 23 new residents.
Its population increased by 21 percent, or 58,617 people, between 2011 and 2016. However, over the same period just 2,585 new properties were built — a fraction of those needed to maintain the status quo.
Conversions of existing buildings is going to play an increasingly important role in solving the national housing crisis, because housebuilders at the mercy of market forces don’t build consistently through economic cycles.
In Britain’s second fastest growing city, Coventry, the population expanded by 35,951 in five years but just 5,390 homes were built in that time. That’s one new home for just under seven new inhabitants. Behind Belfast, the greatest imbalance in building can be found in the commuter town of Luton and city of Manchester where one home is built for every eight people.
London ranks sixth as the fastest growing city with the capital’s population expanding by 7.5 percent, or 613,951 people, between 2011 and 2016. But again, property development is lagging sharply behind with just 124,020 new homes built over the entire five-year period – one home for every five new inhabitants.
At the other end of the scale, Blackpool ranks as Britain’s fastest shrinking town or city. Its population declined 2 percent (2,870) between 2011 and 2016 to 139,578. Meanwhile, 710 new homes were completed.
Blackburn, the second fastest shrinking city in Britain, saw its population decline by nearly 0.3 percent in that time – from 147,489 to 147,049 – but added 820 homes. This finding suggests developers are not being properly incentivised to build where it is most urgently needed.
The research also suggests Britain’s North-South divide is alive and well with eight of the top ten slowest growing towns or cities located north of the Watford Gap, while eight of the top ten fastest growing towns and cities lie in the South.
Ross Andrews, director of Minerva Lending, comments: “We’ve known for many years that the housing supply situation in Britain is poor but this road to ruin of inadequate building is going to end the dream of home ownership for many millions of people over the next 20 years.
“One in 200 people in England is reportedly already homeless. That is already a national emergency that will only be exacerbated if the government does not deliver a housing strategy that works soon.
“With the Budget just two weeks away, the Chancellor should consider extreme measures to boost building before the housing crisis we all recognise spirals further out of control.
“Much is made of the number of long-term empty homes, which topped 200,000 alone in England last year, but figures showing the amount of unused commercial office space going to waste are much harder to come by.
“Light-touch planning permission for office-to-resi conversions is having a growing impact on the sector but it can only be one ingredient in a solution capable of defeating a problem as big as a broken housing market exacerbated by the cyclical nature of housebuilding.
“Property developers often struggle to raise enough funds from traditional lenders so it’s vital, if conversions are going to play a bigger role, that it is made as easy as possible for investors to target the problem with their capital.”