29 Jan 2024

Supply: fixing the housing crisis upstream

You may have heard of the common parable used to explain upstream thinking. It tells the tale of consistently having to save people floating down a river. Eventually, you go upstream and stop the issue causing people to fall in the river to begin with. We can use this to look at resolving the housing crisis, by heading upstream and fixing the supply issues causing a domino effect in society.

There is now a common consensus that we are in a housing crisis. Housebuilding is at its lowest rate in decades and we have a deficit of social homes in the UK, which are designed to be more affordable and provide a long-term foundation for people’s lives. Yet, in the last two years, housebuilding fell far below the government’s previous target of building 300,000 homes a year with under 235,000 new homes, and the current challenges within the sector are unlikely to help turn this around.

We also know that many issues in society are linked: poverty, homelessness, and health inequality, to name a few. We can track these links and see that housing supply is at the very heart of the housing crisis, for example:

  • A lack of (truly) affordable housing creates greater inequality. People may struggle to afford to live with increased expenses, rising private sector rents, and higher mortgage costs. These disparities are particularly felt in economically successful areas.
  • These inequalities exacerbate existing social problems. When a large proportion of a limited income is spent on housing, this can lead to sacrifices in other areas of life, such as spending on food or energy. This widens wealth and health inequalities, as people are unable to create healthy environments to thrive in, with the limited resources available to them.
  • For many families this leads to living below the poverty line. In the most extreme scenarios, this can lead to homelessness. This is particularly evident in the cost of living crisis, with more people struggling to make ends meet.

So, how do we resolve these housing supply issues?

Whilst it is clear that housing supply can be a cause of a domino effect of societal issues, it is also an opportunity to make our way upstream and fix problems at the root.

Reforms are required to create a system that encourages development and tackles housing shortages. Some much-needed change is already taking place. The planning system is often cited as causing delays and complications in building more homes. The recent National Planning Policy Framework update is intended to speed up planning processes to encourage greater levels of development. However, there are other changes needed to improve the planning process and promote housebuilding.

Funding is also a common obstacle to meeting housing supply needs. Funding for affordable housing was cut by 63 per cent in 2010, and the UK Housing Review 2023 outlined that England continues to underinvest in the development of new homes with reductions in grant rates. This coincides with an environment of increased building costs and greater economic uncertainty, Thus, the current economic climate may call for creative solutions. For example, looking at how we can combat underspending, underinvestment, and empty properties can create a wider conversation about using a variety of approaches to tackle a lack of funding.

The housing crisis is solvable but requires collaboration. We have successfully boosted housing supply before, with ‘homes for heroes’ in the 1920s and post-war development in the 1950s. Building strategically to reach these aims must involve asking questions about ‘where we need more homes’ and ‘what types of new homes we need'. This requires a joined-up approach to create solutions that include housing professionals working in partnership across the sector.

The conversation around supply must include a consideration of other discussions within housing. The Better Social Housing Review showed that we must build good quality homes. We also need to look at the impact upon the environment, and how housing contributes to the climate crisis. When we have a coordinated effort across the sector, we can start to tackle the root causes contributing to the housing crisis.

Ultimately, we know that resolving supply issues, and the subsequent domino effects, are beneficial to society as a whole. The government recently published a report looking into monetising the social benefits of reducing rough sleeping, and we know that improving health inequalities creates a foundation with better outcomes for living well. At CIH, we have urged that government put housing at the heart, with a long-term plan to address the key challenges in the sector.

If we begin to tackle these issues upstream, in partnership, we can redesign the system to make a healthier society for everyone.

Written by Megan Hinch

Megan Hinch is a CIH policy and practice officer who leads our work on housing supply and finance.