How many homes are being built in England? Not enough, certainly.
But as the government sets about increasing house building levels, it is important to have a good idea, not just of where we need to get to but where we are at the moment. And I’m not sure the housing minister, Brandon Lewis, really knows where we are at the moment.
Mr Lewis has taken to claiming that there were 181,000 homes built last year. He has repeated this at least twice to my knowledge in the Commons – a fortnight ago in a debate about the Housing & Planning Bill (now an Act of Parliament), and yesterday outlining the newly-announced Neighbourhood Planning and Infrastructure Bill – as well as in various Twitter conversations in recent weeks.
Taking this 181,000 figure at face value, we would be 60-70,000 homes a year short of what most housing economists reckon England needs just to keep up with household growth: to get ahead of demand, we would need even more. So even in a best-case scenario, the shortage is continuing to grow with every passing year (as it has been for at least a couple of decades now).
This is an important point to remember as ministers hail the improvements that have been made in house building levels in recent years: the backlog is still growing at a rate of at least 60-70,000 homes a year.
But that really is a best-case scenario, based on the 181,000 figure that Mr Lewis quotes. Where does this figure come from though? Despite his repeated claims that this is how many homes were “built”, it is no such thing.
Actually, it represents the gross supply of homes in 2014-15. This, crucially, includes not just homes that have been built, but the number created via a change of use from commercial property to residential, of which there were 20,650; and the number of homes created by subdividing existing homes, of which there were 4,950.
The actual number of new-build completions – that is, homes that have actually been built – was, according to the government’s own figures, just 155,080 in 2014-15. So the 181,000 figure that Mr Lewis starts with breaks down like this:
Now, you might argue that 181,000 is the important figure because that is how many homes were added to the housing stock last year. Except it isn’t, because this is the gross supply of homes we are talking about. It fails to take into account the number of demolitions that took place in the same year (many undertaken to make way for the new homes, too).
There were 10,610 demolitions in 2014-15, meaning that the actual increase in the housing stock, the net supply, was 170,690. This is how the minister’s 181,000 figure breaks down if we take out demolitions:
One would expect Mr Lewis to be reasonably well acquainted with that 170,690 figure because it is the headline finding in his department’s annual publication on the “Net supply of housing”, a publication which makes no mention of the 181,000 figure as far as I can see. It is certainly not one that is pushed to the front:
The 181,000 figure is not the only thing that is questionable about Mr Lewis’s repeated statements in this area. He claims too that it represents a 25 per cent increase in the number of homes built:
More than 181,000 homes were built last year… That is a 25 per cent rise last year alone.
But the gross supply figure of 181,000 represented only a 22 per cent rise on the previous year, from 148,670 to 181,300.
Perhaps then he’s talking about new-build completions at that point? No: they only rose by 19 per cent between 2013-14 and 2014-15, from 130,340 to 155,080.
What rose by 25 per cent last year was – as you can see plastered on the front of his department’s publication – the net supply figure, from 136,610 to 170,690. Yet this is not the data he is quoting when he talks of 181,000 homes being “built”.
One final point. As well as overstating how many homes are built, Mr Lewis is also fond of contrasting his 181,000 figure with home many homes were built in the year in which his Labour shadow John Healey was the housing minister (2009-10):
The number of new homes delivered in the past year was not as low as it was under the shadow minister… when it was just 88,000.
The contrast between 181,000 and 88,000 sounds extraordinary. But the 88,000 figure? This is not the gross supply figure (which was 161,200 in 2009-10). It is not the net supply figure (144,870). It is not even the new-build completions figure (124,200).
To find anything resembling 88,000 in this period one needs to look at a completely different dataset, Live Table 208 on house building starts (which housebuilders dislike, incidentally, because it tends to underestimate their output). This records 88,010 starts in 2008-9. Which was actually the year before Mr Healey was housing minister – he was local government minister at that point.
And if we use that data series to look at the government’s house building record last year? Then, the picture is not so flattering. There were still only 137,740 starts in 2014-15. That’s a year-on-year increase of a mere 2.7 per cent (that’s not a typo: two point seven) compared with 2013-14 when there were 134,110.
Confused? I think that might be the idea.
Daniel Bentley is editorial director of the think tank Civitas. He tweet as @danielbentley.