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.

 
 
 
 

In New Zealand, climate change is driving an eco-nationalist revival

The green and pleasant land of the South Island. Image: Getty.

“Ten years ago I would have called them settler f*****g land squatters,” Mike Smith, Maori-dom’s most tenacious activist, said last November as he reflected on the agriculture industry’s central role in driving climate change. “Now I have to try and get these people on board.”

Smith is infamous for taking a chainsaw to Auckland’s most prominent tree on a damp October night in 1994 in protest of the “Pākehā” – or white European –dominated government’s fiscal envelope restraining treaty settlements. Now he’s turned his hand to another cause close-to-home for the Maori, New Zealand’s indigenous population: the environment.

“We’re super vulnerable, like we are to anything,” Smith says. “When it comes to climate change it’s like the poorest people in the world are going to be hit the hardest first, and that’s a lot of us.”

Prime Minister Jacinda Ardern appears, at least rhetorically, the most sympathetic leader to his cause in a decade. In her campaign launch speech late last year, she made the future government’s position clear: “Climate change is my generation’s nuclear free moment.”

This message should resonate with followers of her Labour party: the NZ left has long nurtured an environment-orientated “culture-of-protest”. So Ardern’s call to arms was bound to gain her loyal support among children of the 1960s and ‘70s, who led the march against nuclear ship visits, spurring on the government of the time to wriggle out from the US nuclear umbrella, and place a ban on foreign nuclear ship visits.

Now, it is to the tycoons of deep sea oil exploration they aim to close NZ’s ports.

In this, Smith is not short of support locally, with marches run by grassroots organisations and international animal welfare funds beginning to gain traction with every day New Zealanders. In this, Ardern’s prediction is correct: the Coal Action Network Aotearoa (CANA), is reminiscent of the Campaign for Nuclear Disarmament (CND), an earlier cluster of left-wing pacifists and nature lovers who drove the creation of the nuclear free zone.  

In December, 15,000 passionate protesters marched through the capital. And with the government’s recent ban of offshore oil exploration projects, Jeanette Fitzsimons, former Green party co-leader and the head of CANA, is optimistic about similar change to the energy and farming sectors.

The Labour-NZ First-Green party coalition seems focused on setting a new global precedent, weaning NZ away from a United States which has jettisoned the Paris Agreement. The move replicates another 20 years ago, when New Zealand’s anti-nuclear movement was central to an upsurge in New Zealand nationalism. Now, the same sense of going it alone on foreign policy is apparent both locally and in Parliament.

Dr. Gradon Diprose, a senior lecturer at Massey University, argues that this echoes an older expression of colonial nationalism, that saw “New Zealand as a land of natural abundance”. This: “eco-nationalism” is centered on “protecting certain visions of picturesque landscapes and unspoiled natural beauty”. The slogan “Clean, green New Zealand” is prevalent in popular culture and tourism marketing. The public seems to have latched onto it too, and ranked keeping NZ’s waterways “clean and green” top of a recent survey of of kiwis’ top concerns.

Three decades ago, it was the 10 July 1985 sinking of the Greenpeace flagship Rainbow Warrior that thrust local activists’ fears into the public eye, resulting in an almost nation-wide expression of climate-protectionism.


The bombing, a French intelligence operation sparked by Greenpeace’s calls for an end to foreign nuclear testing in the Pacific, galvanised a great deal of change to New Zealand’s overseas defence policies. A lack of censure from New Zealand’s Western allies drove Wellington to distance itself from the United States, while the shock of seeing a friendly nation violate NZ’s sovereignty left many at home seething.

Thirty years on, the foreign policy split throughout the Anglosphere, regarding Russian-Western relations, globalism, and the old international rules-based order, is becoming wider. Climate change is just the tip of the iceberg.

Most Kiwis you talk to will shake their heads in disapproval at US president Donald Trump’s scandalous outing last year in Helsinki. But US defiance of internationally brokered climate resolutions is something they can see clearly reflected in rural communities across the country.

The country saw records broken at both ends of the extreme weather spectrum last year. As 2018 kicked off, Kiwis sweltered through the hottest summer on record, while in Golden Bay, a small inlet near the northern tip of the South Island, residents endured the largest flood in 150 years. So, when President Trump tweets “So much for Global Warming”, the majority of New Zealanders look back fondly on NZ’s 1985 decision to boycott the “ANZUS” treaty, putting New Zealand at odds with its war-time ally America on defence legislation.

Public calls to take the same track on environmental regulation have become louder in the wake of Donald Trump’s election. The former US Secretary of State, Rex Tillerson, received a frosty “unwelcome” while on a flyby to the capital in 2017, with the New York Times’ Washington correspondent, Gardiner Harris remarking: “I’ve never seen so many people flip the bird at an American motorcade as I saw today”. Protests against President Trump’s stance on climate change are beginning to gain greater traction further still, with the hundred-strong “march for science” setting the tone for the new government later that year.

New Zealand certainly isn’t afraid of radicalism, and its activists are persistent. It’s already banned single use plastics in supermarkets. Plenty more is to come, Smith says.

And yes, reform is going to inhibit sometimes vital industries: “It doesn’t matter which way you spin the dice on this, whatever’s being done is going to hurt. People who are looking for a painless way of mitigating climate change, [but] I don’t think there is one.”

But among Smith’s troupe of climate agitators, the feeling is that, without drastic change, “the land”, the heart of the Maori ethos, is going to be hurt far more.

Back in Auckland, NZ’s financial hub, an electric scooter craze is gripping the city. This, too, has gained the support of local environmentalists. In New Zealand, a national sense of pride is always coupled with a certain eccentricity. In a country this size, change always starts small.