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.

 
 
 
 

Five ways in which the rest of the world can avoid the homelessness crisis plaguing the US

Housing for all. Image: Nicobobinus/Flickr/creative commons.

Homelessness is a growing problem in the UK, where the number of people sleeping rough has doubled since 2010, yet it is dwarfed by the scale of the issue in the US. More than 500,000 homeless were found across the US during just one night, compared to the UK’s 2017 count of 4,751. Changes in the definition of homelessness and flawed methodologies suggest that the true number for the US could be anywhere from 2.5 to 10.2 times greater.

Millions more live in overcrowded or slum housing, forced to choose between the damage that poor conditions do to their physical and mental health, and the street. All of the US’s housing issues – from foreclosures to evictions to poor conditions – hit communities of colour the hardest.

This is due to a legacy of discrimination, which continues to undercut any commitment to safe and decent housing for all residents, whether in the private or public sector. In my recent book, City of Segregation, I explain how the long, violent history of creating spaces for the white and privileged classes is embedded in a number of practices, which continue in US cities to this day.

Exporting inequality

As private developers and investors seek out urban land in major cities around the world to secure their fortunes, real estate patterns and practices developed within the US are increasingly being observed elsewhere.

In cities as diverse as London, Sydney and Durban, community groups which have been working for decades to improve their neighbourhoods languish with little public or private resource. Meanwhile, developers create spaces for foreign investors and new residents, who anticipate certain protections and privileges such as greater security, high quality amenities and neighbours with similar interests and backgrounds.

This is a driving force behind rising evictions and the criminalisation of homelessness, alongside gated communities, hostile architecture, “broken windows” policing with its focus on prosecuting activities such as graffiti or jaywalking and the growing privatisation of public spaces through regeneration.

But there is still time for other countries to choose a different path. The UK, in particular, can build on the legacies of the post-war political consensus that all residents should have access to quality housing, and its acknowledgement of institutional racism and some history of government anti-racist campaigning.

Both legacies should be improved, but a renewed commitment to a programme of housing and anti-racism are central to increasing equality, prosperity and well-being for all. Based on my research, I’ve come up with five steps which the UK and countries like it can follow, to ensure that future development reduces – rather than drives – homelessness and inequality.


1. Build social housing

Unlike the US, the UK acknowledges a right to a home, and within living memory provided it for a huge swathe of British society. Social housing – whether in the form of traditional council flats, cooperatives or community land trusts – provides a variety of housing types and keeps rents from rising too far beyond wages.

When social housing is widely available, it makes a huge difference to people who – for one reason or another, and often through no fault of their own – become homeless. With social housing to fall back on, homelessness is a temporary condition which can be safely resolved. Without it, homelessness can become a life-destroying downwards spiral.

2. Preserve and expand community assets

Severe segregation in the US stripped entire communities of access to quality food, jobs, education, green spaces, services, banks and loans. Poverty is endemic, and can easily tip into homelessness. While far from perfect, the UK’s post-war commitment to universal provision of services, such as education and health care, and building social housing across all neighbourhoods underpinned a surge in upward mobility.

This achievement should be salvaged from the damage done by Right To Buy – a policy which sold off social housing without replacing it – and austerity, which has prompted a sell-off of public assets and land, as well as the closure of childrens’ services, libraries and community centres.

3. Decommodify housing

A market geared towards building apartment blocks for the portfolios of investors who will never live in them cannot produce the kind of housing and neighbourhoods which residents need, much less at a price they can afford.

While London has been badly affected for some time, this trend is now spreading to other areas of the UK and Europe. Local and national governments must act to prevent global demand for housing as investments from driving prices beyond the reach of those who need real homes.

4. Build communities, not walls

Gates, bars, armed security and homeowner restrictions are all ugly traits of private housing developed within the US context of desperate inequality and racism. The UK has a long and vibrant tradition of community development, creating a supportive built environment and social infrastructure of schools, libraries and other municipal services for residents.

Community assets. Image: Helen K/Flickr/creative commons.

This kind of development, and the social mobility and growing equality it fosters, safeguards public health and safety – not big walls, barbed wire and security guards. The private rented sector in the UK should be regulated to bring it more in line with Europe, where tenants prosper with security of tenure and strong regulation of rents and rent increases.

5. Raise your voice

Those who are bearing the brunt of our current housing crisis must be at the centre of efforts to change it. From tenants’ associations and renters’ unions, to campaign groups such as Justice for Grenfell, it’s vital to support those voices advocating fairer housing rights.

This also means rejecting austerity’s constant cuts to public services, funding social support for physical and mental health and ensuring that homes are safe, decent and secure, to create a safety net for those who are working to improve their communities.

The Conversation

Andrea Gibbons, Researcher in Sustainable Housing and Urban Studies, University of Salford.

This article is republished from The Conversation under a Creative Commons license. Read the original article.