From the FT:
Britain found to offer worst-value housing of advanced economies
Britain found to offer worst-value housing of advanced economies
Britain’s housing offers the worst value for money of any advanced economy, combining high prices with old, cramped, poorly insulated buildings and long commutes, according to an influential think-tank.
The Resolution Foundation said high levels of outright home ownership obscured how bad the UK’s housing affordability was relative to other countries. Its analysis, published on Monday, showed that if all households — including owners and subsidised social renters — were renting their homes on the open market, they would have to devote 22 per cent of their spending to housing services.
Compared on this basis — by combining actual with “imputed” rents — housing consumed a larger share of spending in the UK than in any OECD country except Finland, the think-tank said.
Its findings will inflame an already heated debate over housing and planning in the run-up to the next general election, as both main parties seek to win over younger voters struggling with sky-high rents.
Rachel Reeves, shadow chancellor, last week promised to tear up a planning system she described as “the single greatest obstacle to our economic success” and reintroduce mandatory local housing targets.
Adam Corlett, principal economist at the Resolution Foundation, said the housing crisis had been “decades in the making”, with successive governments failing to build or modernise enough homes, adding: “That now has to change.”
UK households both paid more and got less for their money than in many countries with similar levels of income, the Resolution Foundation found.
In 2018, households in England had on average 38 square metres of floorspace per person — outstripped not only by their French and German counterparts, who had 43 sq metres and 46 sq metres on the latest count, but even by Japan, with 40 sq metres and residents of New York’s central city district, where the average was 43 sq metres.
Despite long-running concerns that the UK’s housing shortage is worsened by second-home owners leaving properties empty, Britain also has one of the lowest rates of second-home ownership in Europe and one of the lowest vacancy rates in the OECD, the Resolution Foundation found.
It citied a study showing 4 per cent of British households owned second homes for their own use, compared with 9 per cent in France, 17 per cent in Finland and 22 per cent in Spain.
Meanwhile, the UK’s housing stock is easily the oldest in the EU, with almost four in ten homes built before 1946, compared with three in ten in France, one in four in Germany and one in ten in Finland — with knock-on effects for energy efficiency.
It is also farther flung: 42 per cent of UK commuters travelled for more than an hour a day to reach their workplace in 2019 — well above the EU average of 37 per cent.
After adjusting for the general level of prices across each economy, people in the UK paid more for housing, relative to other goods and services, than in any other developed country — more even than in New Zealand and Australia, which have their own perennial housing crises.
“We often live in smaller, older and poorer-quality homes in the UK than households in many counterpart countries and pay a princely amount for that privilege,” the Foundation said, urging both main parties to “bring on the manifestos” to tackle the issue in the general election campaign.
