Here’s why counting houses is hard

We literally have no idea how many houses could be in there. Image: Getty.

We may be getting better at building more houses but unfortunately we’re not very good at counting them.

In August, the housing minister was citing the latest DCLG New Build statistics as proof that the country is building again. Completions across England had apparently reached 153,000 in the year to June 2017“the highest level since 2008”. On this basis, the minister may be pleasantly surprised and slightly confused when he reads the DCLG’s Net Supply release in November and finds out that housebuilding completions had already reached 155,000 in 2014-15, and are actually much higher.

The housing minister can perhaps be forgiven some excitement over the first release of housebuilding statistics during his tenure. Based on the average tenure of previous housing ministers, he’s probably only got another three or four to look forward to. However, despite some allowance for over-excitement, it is irresponsible for the housing minister to be quoting the New Build statistics as absolute measures of housebuilding as they under-count the number of new homes actually being built.

It is particularly irresponsible because DCLG are well aware that there are issues with the New Build statistics. In the introduction to their New Build statistical release they suggest the New Build figures should only be “regarded as a leading indicator of overall housing supply”, and instead the Net Supply release “is the primary and most comprehensive measure of housing supply”.

The scale of the under-count is apparent when comparing the New Build data to the more comprehensive Net Supply release. While the Net Supply release includes conversions, changes of use, and demolitions to calculate the net change in dwellings, it also includes a more comprehensive measure of housebuilding.

The latest available Net Supply data for 2015-16 recorded 164,000 housebuilding completions across England compared to only 140,000 completions recorded in the New Build data. That suggests the New Build release is currently missing around 15 per cent of the housebuilding market.

Beyond the widespread confusion created by the publication of different housebuilding numbers, this issue has important consequences for policy makers. Our failure to accurately measure housebuilding and our limited understanding of who is doing the building make it very difficult to accurately assess the success or failure of existing policies and identify new ones that could increase new supply.

The exact reasons for the under-count are not confirmed but it appears to be linked to the falling market share of the largest provider of warranties on new homes. The National Home Building Council (NHBC) provides a substantial share of the data used to create the New Build statistics, and it’s been widely assumed that they have a market share of around 80 per cent. Based on an assumed market share, the NHBC data is grossed up to provide a measure for the whole market alongside other sources of building control inspection data.

However, recent years have seen a broader range of groups delivering new homes. Volume housebuilders still deliver the majority of new homes but there has been an increase in activity by SME housebuilders, high-density luxury developers, build-to-rent investors, and housing associations. For some of the firms and organisations in these groups, an NHBC warranty may be too expensive or not attractive compared to the alternatives. NHBC’s market share has probably fallen over this period.

A fall in NHBC’s market share is apparently confirmed by the request for a review of its market undertakings from the Competition & Markets Authority (CMA). Although most of the market share data published by the NHBC and the CMA in the review is confidential, there is an interesting finding in the CMA’s provisional decision (paragraph 4.32). Using new home data from nine warranty providers including NHBC, the CMA estimated the NHBC market share at around 70 per cent.

If, instead of grossing up the NHBC data by 80 per cent market share, we use 70 per cent then we would expect the DCLG New Supply data to be around 14 per cent higher (0.8/0.7). That difference would account for nearly all of the shortfall in the New Build completions when compared to the Net Supply housebuilding data. While there may be other factors causing the under-count, it would appear that this market share issue is the most significant factor.


It would be great if we had an accurate and regularly updated measure of housebuilding, but it turns out that counting houses is actually quite difficult. The Net Supply data is far from perfect, and it’s only released once a year with a substantial delay but it’s the best we currently have.

Meanwhile, in Ireland they’ve had the opposite problem, with an over-count of new homes. Official completions data uses electricity connections – but it turned out that the actual number of new build completions between 2011 and 2015 was 42 per cent lower than the official figures due to a large number of re-connections.

Until we see a substantial re-working of the DCLG’s New Build statistics, it appears the best option is to assess the full range of available indicators that cover both housebuilding and total supply. However, perhaps the biggest frustration is that DCLG are aware of the issues with the New Build statistics yet we still see quarterly political point scoring based on these flawed data. Given the complexities of the housing market, it is only once we move past this short-term politicking that we have any hope of solving the crisis.

Neal Hudson is an independent housing analyst, who tweets as @resi_analyst. This article originally appeared on his blog.

 
 
 
 

“One of the greatest opportunities facing our region”: Andy Burnham on making work better for older people

Andy Burnham (then health secretary) and Gordon Brown (then prime minister) meeting an older voter in 2010. Image: Getty.

In the Greater Manchester Strategy, published by the Combined Authority in October, we set out our vision for Greater Manchester, including our ambitions for employment.

It’s not simply about getting more people into work – though this is important, given that our employment rate across the region is still below the national average. It’s also about improving the quality of work; creating better jobs with opportunities for people to progress and develop. That’s why we’re working towards a Good Employer Charter to encourage businesses across the region to step up.

But if we want to make a real difference for the people of Greater Manchester, we need to focus on those who currently struggle most to find a job, including people with disabilities, people with fewer qualifications – and older people.

One in three people aged between 50 and 64 in the Greater Manchester area are out of work. Adding in older workers on low pay, nearly half (46.3 per cent) of 50-64 year olds in Greater Manchester are either out of work or in low paid, low quality jobs. This is a bad situation at any age – in your 50s, with fewer chances to get back into work and less time to make up the shortfall in income and savings, it’s terrible.

It’s also bad for the region. People out of work are more likely to have or develop health problems, and need more care and support from our public services. We are also missing out on the skills and experience of thousands of residents. If Greater Manchester’s employment rate for 50-64 year olds matched the UK average, there would be 19,000 more people in work – earning, spending and paying into the local economy. GVA in the region could grow by £800m pa if we achieved this. 

If it’s bad now, it’s only going to get worse unless we act. This is the fastest growing age group among working age people in Greater Manchester. And with the rise in State Pension Age, we are no longer talking about 50-64 year olds, but 50-65, 66 and eventually 67. There are more older workers, and we are working for longer. Many of us are now expecting to work into our 70s to be able to earn enough for our later lives.


As the State Pension age rises, older people without decent work must struggle for longer without an income before they can draw their pension. But if we approach this right, we can improve people’s lives and benefit our local economy at the same time. It makes financial and social sense.

Older people bring a wealth of knowledge and experience to the workplace, but we must make sure we provide a work environment that enables them to flourish. If we can help them get into good quality, suitable work, older people will be able to retain their financial independence and continue contributing to the region’s economy.

A report published earlier this week by the Centre for Ageing Better looks at exactly this issue. Part of our strategic partnership with the Centre for Ageing Better, the report is based on research conducted over six months with older residents in five communities with high levels of economic disadvantage across Greater Manchester.

In Brinnington, Stockport, the team met Adrian, in his late 50s. Adrian is a trained electrician, but since being made redundant ten years ago, has only managed to get a few short-term contracts. These short term, zero hours contracts, are “more trouble than they’re worth” and have left Adrian stressed and worse-off financially.

He has been sent on a large number of employment-related courses by JobCentre Plus, and has a CV with two pages listing training he has completed. However, these courses were of little interest to him and did not relate to his aim of finding stable work as an electrician. He told the team he only attended most of the courses so he “doesn’t get in trouble”.

Adrian recognises there are other types of work available, but much of it is warehouse based and as he is not in the best physical health he does not feel this work is suitable. He said he has “given up” on finding work – even though he still has 8 or 9 years to go until State Pension age.

Adrian’s story shows how badly the system is failing people like him – highly skilled, in a trade that’s in high demand, but being put through the motions of support in ways that make no sense for him.

A major finding of the report was the high number of people in this age group who had both caring responsibilities and their own health problems. With the need to manage their own health, and the high cost of paying for care, people found that they were not better off in low paid work. Several people shared stories of the complexity of coming off income support to take up temporary work and how this left them worse off financially – in some cases in severe debt.

The report concludes that changes are needed at every level to tackle chronic worklessness amongst this age group. This is not something that employment and skills services alone can fix, although Adrian’s story shows they can be much better at dealing with people as individuals, and this is something we want to do more on in Greater Manchester. But the health and benefits systems need to work in sync with employment support, and this is a national as well as a local issue.

Employers too need to do more to support older workers and prevent them from falling out of the labour market in the first place. This means more flexible working arrangements to accommodate common challenges such as health issues or caring responsibilities, and ensuring recruitment and other processes don’t discriminate against this age group.  

Greater Manchester has been at the forefront of devolution and has been using its powers to bring together health, skills and employment support to improve the lives of local people. The Working Well programme is a perfect example of this, providing integrated and personalised support to over 18,000 people, and delivering fantastic outcomes and value for money.

Such an approach could clearly be expanded even further to include the needs of older people. Ageing Better’s report shows that more can and needs to be done, and we will use their insights as we prepare our age-friendly strategy for Greater Manchester

We have to act now. In 20 years’ time, over a third of the population of Greater Manchester will be over 50. Making work better for all of us as we age is one of the greatest economic and social opportunities facing our city region.

Andy Burnham is the mayor of Greater Manchester.

For more about the work of Greater Manchester Combined Authority and its Ageing Hub, click here.