Blog: The golden age of UK housebuilding

By: ameer@trustedteam.com

When the Coronation of Her Majesty Queen Elizabeth II took place in June 1953 the average house cost just £1,692 and the average salary was £333.  Now, on the eve of His Majesty King Charles III’s Coronation on 6 May, it’s a very different picture.  The average house price currently stands at £294,329 and the average salary is £31,928 meaning that houses are now at their most unaffordable level for around 150 years.  

Perhaps the only common factor between now and post war Britain is the severe lack of housing the country faces – and it’s this chronic shortage of new build homes that has been a major contributor to the current housing crisis. 

So, the Coronation is a great opportunity to look back 70 years at the ‘golden age’ of UK housebuilding where well over a quarter of a million new homes were built each year – something which can only be dreamed about today.  

Housebuilding in Post War Britain: 

There was a huge shortage of housing after World War II – with no new housing being built during the six-year war period.  Over one fifth of all homes in Britain had been destroyed during the war with many people having to live in army camps or sharing accommodation.  

It was estimated that around three million new homes were needed immediately and as a result the government aimed to build over 300,000 new homes each year. However, in a post war environment there were many shortages and these included shortages of builders, materials, and money.  

In May 1946, the government announced its plans to build several ‘new towns’ to relocate people in poor or bombed out areas following the Second World War.  Commenting at the time about the government’s vision for New Towns and their post-war housing policy, Lewis Silkin, Labour’s Minister of Town and Country Planning said: 

“Basildon (one of the new towns) will become a place which people from all over the world will want to visit.” 

The new towns were built in three waves and the intention was to build housing ‘fit for all income groups, not just the working class’.    

The first wave of new towns was built between 1947 and 1955.  Stevenage was the first new town, followed quickly by towns such as Crawley, Hemel Hempstead, Harlow, Welwyn Garden City, Hatfield, Basildon, Bracknell and Corby. 

The second wave of new towns were built in the early 1960s and included towns away from the South of England and included Skelmersdale, Telford, Livingston, Redditch, Runcorn and Washington.  The third wave was created or expanded in the late 1960s and included Milton Keynes, Peterborough, Irvine, Northampton, Ipswich and Warrington. 

A growing economy in the 1950s meant that around 250,000 new local authority homes were built each year.  In addition to the growth of the new towns, around 750,000 brick homes were also built between 1945 and 1953 as well as thousands of prefabricated houses which were factory made and assembled on site. 

Many ‘non-traditional homes’ were built using various prefabrication approaches and as a result of these new building approaches, total annual new housing completions soared, and peaked in 1968 at around 400,000.  The 1960s was also the decade of tower blocks – which allowed many people for the first time to have a new property with modern facilities. 

Quantity rather than quality became a priority for the government – in some cases some good homes were demolished to make way for big estates.  Some New Towns were successful, whilst others suffered high unemployment and high levels of poverty. 

Current Housebuilding: 

The scale of the current housing supply shortage in England can be highlighted by comparing the actual number of houses built in the last 30 years to the number built in the previous 30 years.   

Between 1959 and 1988, approximately 7.5 million new homes were built, whereas only 3.3 million new homes were built in the last 30 years.  This suggests a total shortfall of around 4.2 million homes. 

Yet, even as the growth in the housing stock has been declining, demand for homes has been increasing as the population continues to grow and more ‘singletons’ want to buy homes on their own. 

In the government’s manifesto document published in 2019, they set themselves a target of building 300,000 new homes a year by the mid-2020’s.  This doesn’t now look achievable.  Indeed, the last time 300,000 new homes were built by any government in a year was in 1977. 

In January, the Centre for Policy Studies published an excellent report called ‘The Case for Housebuilding’.  The report stated that the arguments that housebuilding is roughly keeping pace with new household formation are flawed, as are claims that that enough homes can be delivered simply by building on brownfield land or building out existing planning permissions. As an example, London could only build 24% of the homes they need over the next 15 years on currently existing brownfield sites. 

Commenting in the report, the Right Hon Kit Malthouse MP, former Housing Minister, said: 

“We should all be concerned about where and how our children are going to live, but more than this, we also have a duty to give them the same or a better chance at home ownership as their parents and grandparents.  We simply cannot do this without building millions of new homes.” 

This view is supported by several individuals, charities and think tanks.  The Centre for Cities has said that it will take at least 50 years to catch up with housing demand even if the government target of 300,000 new homes a year is met.  

And as recently as last month, Michael Gove, Secretary of State for Levelling Up, Housing and Communities, said the UK housing market was ‘broken’ and ‘desperately’ needs a greater supply of new homes and higher building standards.  In the same report, the Chief Executive of Shelter, Polly Neate, said the UK’s housing policy was ‘a mess’. 

So, what can be done to solve the housebuilding problem? 

There is no doubt that achieving the national 300,000 housebuilding target will be difficult, and it will take all parts of the market to deliver this level of housebuilding - from private developers to housing associations and local government.  

The recent government announcement therefore that councils will keep 100% of their Right to Buy receipts to build thousands of new council homes is to be welcomed. But for private housebuilders facing economic headwinds and housing associations balancing the costs of important remediation work with providing new homes, what is needed from government is stability and certainty. This is, however, quite the opposite of what is being proposed in the government’s planning reforms. 

The watering down of housebuilding targets, alongside a range of other reforms, is already having a dramatic impact. New planning applications are at their lowest level on record and councils up and down the country are ripping up their local plans.  

At the same time, changes to the way developers contribute to new affordable homes has raised concern that fewer will be delivered. Important work to design the new Infrastructure Levy this year must safeguard funds for more affordable options to rent and buy.  

With enough political will and by listening to experts in the field, many of these challenges can be resolved. In the long term we can surely start to deliver on the homeownership aspirations of millions of people.  

The issues facing homeownership are deep-rooted and wide-ranging but building enough homes to meet demand is the right place to start.  Home ownership was once a rite of passage for young people growing up, but over the last decade house prices have become increasingly out of reach for millions of people. We need a national conversation about the reasons why we’re not building enough homes and we need all the political parties to address the real housing issues this country faces.  

As ‘The Case for Housebuilding’ report succinctly concludes: 

“The fundamental case for housebuilding is that without it, Britain will become a less productive, less equal, less fair, and less happy country.  If we want to rebuild our economy after the pandemic and create a better society, we need to get building”. 

Wouldn’t it be good if we could look back in future years and agree that the Coronation of King Charles marked the start of a new golden age of UK housebuilding. 

Martese Carton is director of mortgage distribution at Leeds Building Society. 

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