London's housing in short supply

The release of the first set of 2011 census data in July contained valuable indicators for the housing market. In particular, the fact that the UK population was bigger than previous government estimates added further weight to the argument that current levels of house building are inadequate in the context of a growing population.

Housing shortfalls

Further interrogation of the data makes clear that this is not simply a story of undersupply at a national level, but much more one of insufficient product of the right type being built in the right location.

Of all of the regions, London saw the highest percentage increase in population over the 10 years to 2011 as it grew from 7.17 million to 8.17 million. Over that period the number of new households rose by 22,000 more than the increase in housing stock.

Perhaps more pertinently, the number of people per dwelling rose from 2.38 to 2.50, as a lack of house building forced increased levels of occupancy. This occurred despite the fact that the lowest growth in London’s populations was amongst those of school age, suggesting more sharing among those of working age.

This can be used to estimate the housing shortfall that was built in London in the past decade. Our calculations suggest that a further 193,000 units would need to have been delivered to provide sufficient housing stock to maintain 2001 levels of occupation in the capital.

By contrast, applying the same measure to the North East of England suggests that increases to the housing stock exceeded the theoretical increased demand by 15,000, meaning fewer occupants per dwelling.

Taken from
Residential Property Focus Q3 2012