Building more homes Contents

Chapter 1: The state we are in

15.House prices in the UK rose dramatically in the first few years of this century up to the financial crisis, as demonstrated by Figure 2:

Figure 2: Growth in UK real house prices (2011 prices), 1930 to 201413

Line chart showing growth in UK real house prices from 1930 to 2014

Source: Office for National Statistics, ‘House Price Index’, September 2015 (Table 22): [accessed June 2016] Bank of England, ‘”The UK recession in context: what do three centuries of data tell us?”: Data Annex: Version 2.2’, July 2015 (Table 21): [accessed June 2016]

16.The growth in house prices has picked up again recently: UK average house prices increased by 8.2 per cent in the year to April 2016:

Figure 3: Annual house prices rates of change in the UK from January 2006 to April 2016 (12 month percentage change)

Line chart showing annual house price rates of change in the UK from January 2006 to April 2016 – 12 month percentage change

Source: Office for National Statistics, Statistical Bulletin, House Price Index, April 2016: [accessed June 2016]

17.At the same time as house prices have risen, the proportion of first time buyers in the middle and lower end of the income distribution has decreased, as shown by the comparison in Figure 4 between 2003/04 and 2013/14. In England, 72 per cent of first time buyers now have an income14 that places them in the top 40 per cent of incomes in the country, compared to 65 per cent a decade ago.15

18.For younger people this worsening affordability means that their chance of owning a home is increasingly dependent on whether they have family resources to draw on—the so called ‘bank of mum and dad’.

Figure 4: Proportion of first time buyers in England from each income quintile, 2003/04 and 2013/1416

Column chart showing proportion of first time buyers in England from each income quintile lowest to highest income for 2003/2004 and 2013/2014

Source: English Housing Survey, Household Report 2013–2014, July 2015, Annex Table 3: [accessed June 2016]

19.People who have been able to buy a home pay substantially less for their housing costs as a percentage of their income than renters do at present. As shown in Figure 5, in 2013/14 private renters and social renters spent an average of 43 per cent and nearly 31 per cent respectively of their gross income (including housing benefit) on rent; owner occupiers by contrast spent 19 per cent of gross income on mortgage repayments.

Figure 5: Percentage of gross weekly income of household reference person and partner (including and excluding housing benefit) spent on mortgage payments or rent by tenure in England, 2013/1417

Column chart showing percentage of gross income including and excluding housing benefit spent on mortgage payment or rent by tenure in England for 2013/2014

Source: English Housing Survey, Household Report 2013–14, July 2015:–14.pdf#page=37 [accessed June 2016]

20.Affordability for private renters is a particular problem in London where 60 per cent of gross income on average is spent on rent. This compares to 39 per cent in other urban areas and 33 per cent in rural areas.18

21.Worsening affordability across all tenures has been exacerbated by a failure to build sufficient numbers of new homes. The 2004 ‘Review of Housing Supply’ by Dame Kate Barker estimated the number of private and social sector homes required to be built annually by 2016 to either:

These targets are shown in Figure 6 below against the net additions to the housing stock over the period.19 House prices in England increased by 9.1 per cent in the year to April 2016.20

Figure 6: Estimated annual number of houses required for scenarios identified in the 2004 Barker Review and actual net additions to the housing stock, England, 2006 to 2015

Stacked line chart showing estimated number of houses required for scenarios identified in the 2004 Barker Review and actual net additions to the housing stock in England from 2006 to 2015

Source: HM Treasury, Barker Review of Land Use and Planning, Final report, December 2006: [accessed June 2016] and DCLG, ‘Live tables on net supply of housing’, Table 122: [accessed June 2016]

22.This chapter identifies the reasons, as explained to us in evidence, why housing policy has failed over recent decades. These reasons can be summarised as follows:

The role of demand

23.Witnesses told us that population growth, rising incomes and greater mortgage availability had all led to rising demand for housing.

Population growth

24.The number of households in England increased from around 18.5 million in 1988 to an estimated 22.7 million in 2014.21 Projections from the Department for Communities and Local Government (DCLG) suggest there will be 27.6 million households by 2037.22 This represents an average annual increase of 210,000 households.23 These projections assume that 32 per cent of the projected household growth is attributable to net migration with 68 per cent accounted for by natural change (births less deaths).24

25.Lord Green of Deddington, Chairman of Migration Watch, told us however that immigration had become the “key driver” of household growth. Migration Watch questioned the basis for the Department’s household projections: they said the Department’s figures were based on 2012 population data from the Office for National Statistics but that in the latest population data (2014), estimated long-term net migration had increased to 185,000 a year compared to 165,000 a year in 2012.25

26.Some witnesses however pointed out that immigrants, especially recent arrivals, live at higher densities and therefore do not affect housing demand by as much as headline migration figures would suggest. Professor Tony Champion said that when immigrants arrive, “they tend to live at quite high density in quite large households, but the longer they live here the more they tend to spread out and get more space.”26 Recent migrants are much more likely to live in the private rented sector, as illustrated by Figure 7.

Figure 7: Housing tenure for non-UK born and UK born by length of residence, England and Wales, 2011 Census data

Bar chart showing housing tenure for UK-born and non UK-born by length of residence in England and Wales from 2011 Census data

Source: Office for National Statistics, Social and Economic Characteristics by Length of Residence of Migrant Populations in England and Wales, 4 November 2014:–11-04 [accessed July 2016]

27.Professor Danny Dorling from the University of Oxford argued the fact people were living longer was having the biggest effect on housing demand.27 Professor Robert Rowthorn from the University of Cambridge said longevity may affect demand for housing more than immigration: “longevity may mean more people living on their own, for example, and more single-person households. Immigration might not mean that in the same way.”28

Rising incomes

28.Income growth over recent decades has played a significant part in rising house prices. Professor Paul Cheshire of the London School of Economics explained that:

“there is a direct demand for one of the most important attributes of housing, which is space in them, and that is very sensitive to incomes … as people get richer, they try to buy more space in houses.”29

Professor Muellbauer of the University of Oxford thought that around two thirds of the rise in UK house prices since 1980 was attributable to rising income per house.30

Greater availability of mortgages

29.The liberalisation of the mortgage market, not just rising incomes, was also cited by some witnesses as a reason for the rise in house prices seen over recent decades.31 Sir John Cunliffe, Deputy Governor for Financial Stability at the Bank of England, said that current low interest rates “clearly” increase prices but the issue is that “there must come a point at which people can no longer afford to buy”. He noted however that mortgage terms had been extended to aid affordability.32

30.The New Economics Foundation said structural problems with the banking system that exacerbate house price inflation need addressing, including reform of banks’ capital requirements to “no longer amplify incentives towards mortgage lending” at the expense of other lending.33

31.Demand for housing fuelled by demographic change, immigration, rising incomes and greater access to finance over the last few decades have made a substantial contribution to rising house prices and worsening affordability.

32.If immigration remains at current levels, it will be a large factor in the future demand for housing, especially in the London private rental sector.

Supply of land

33.Martin Wolf, chief economics correspondent at the Financial Times, said that “it must be the case” that the restrictions on the use of land are a “fundamental factor in determining the price of housing and above all the land on which the houses sit… the difference in the value of the land that is built upon next to the land that cannot be built upon is so vast”.34 Mr Wolf had previously illustrated his point in a 2015 article in the Financial Times where he noted that in 2010, agricultural land around Cambridge was worth in the region of £18,500 a hectare while neighbouring residential land cost around £2.9 million a hectare.35

34.Professor David Miles, a former member of the Bank of England’s Monetary Policy Committee, told us that restrictions on the supply of land were “an enormous factor” in the increase in UK house prices over recent decades.36 But Lord Kerslake, former Permanent Secretary at the Department for Communities and Local Government, did not see it as the main problem; he said that:

“however slick, efficient and effective you make the planning system, you will not double supply through that route.  That is just for the birds … You need to carry on improving the planning system, but not to see it as the central issue”.37

35.The planning system, in restricting the supply of land for development, has an obvious effect on land prices. This is demonstrated by the huge differences in price between agricultural land and residential land on the edge of some cities.

Private sector construction

36.The Government’s aim of building one million homes in England over the course of the present Parliament implies an average increase of 200,000 homes a year. As Table 1 shows, the last time there were that many net additions to the housing stock was in 2007/08.38 But there has been increasing activity in recent years, with 170,000 net additions in 2014/15 (in France by contrast, around 350,000 dwellings were built in 2015).39

Table 1: Changes in net housing stock in England, 2007/08 to 2014/15


New build completions

Net conversions

Net change of use

Net other gains


Net additional dwellings

























































Source: DCLG, ‘Live tables on net supply of housing’, Table 122: [accessed June 2016]

37.Housebuilding in England today has been left predominantly to the private sector. Witnesses suggested there were a number of problems with the industry at present.

Decline in smaller firms

38.John Stewart, Director of Economic Affairs at the Home Builders Federation, said that the numbers of smaller housebuilders, which he defined as building 100 units or fewer a year, peaked in 1988 at around 12,200 firms but dropped to around 2,400 by 2014.40 The decline is illustrated in Table 2 below.

Table 2: Number of firms registering low volumes of housebuilding, 1988 to 2014

Number of units registered




1 to 10 units a year




11 to 30 units a year




31 to 100 units a year








Source: Federation of Master Builders (EHM0140)

39.The Federation of Master Builders identified two main barriers to entry: the difficulties of smaller builders accessing finance since the financial crisis and the way in which smaller sites are treated in the planning system.41 Jennie Daly, UK Director of Planning at Taylor Wimpey plc, acknowledged that the barriers to smaller and medium sized firms were “significant”:

“We are a large scale business with a very substantial and professional staff, and we still find the process risky, difficult to predict and costly. For the smaller and medium sized housebuilder, that is tenfold in volume and risk.”42

Lack of competition in the sector

40.The dominance of the large housebuilders was questioned by some witnesses. The Royal Town and Planning Institute said the fact that the three biggest housebuilders built a quarter of all new homes in 2014 was demonstrative of “oligopolistic characteristics” in the market.43 Lord Kerslake similarly questioned the competitiveness of the industry: “One of the questions you might ask yourself is who the last new big housebuilder to come to the market is.  The answer is that there is none … I do not think that makes it a healthy competitive sector.”44

Shortage of skills in the industry

41.John Stewart described the shortage of skills as “probably the biggest challenge the industry faces.”45 In October 2015, the recruitment firm Randstad claimed that one million more construction workers would be required by 2020 (this was however UK wide and estimated on the basis of building 300,000 UK homes a year).46

42.Smaller builders however did not see it as a pressing problem: a 2015 survey of small and medium-sized builders by the Federation of Master Builders found only 27 per cent of respondents cited ‘shortage of skilled workers’ as a main constraint on their ability to build more homes.47

Pace of delivery from large housebuilders

43.A common criticism of large housebuilders is that they sit on large amounts of suitable building land and develop it slowly in order to keep prices high.48 This is often referred to as ‘land banking’. Table 3 below displays the land currently held by the three largest housebuilders.

Table 3: Land holdings and completions by major housebuilders, UK, 2015



Taylor Wimpey

Homes completed in 2015




Plots in ‘short-term landbank’49




Plots anticipated from ‘strategic land holdings’51




Source: Barratt Developments PLC, 2015 Annual Report, Oct 2015: [accessed June 2016]; Persimmon PLC, Annual Report 2015, December 2015: available at [accessed June 2016]; Taylor Wimpey, 2015 Annual Report: [accessed June 2016]

44.In their latest annual reports, the three largest housebuilders declared a target level of land with planning permission that they are aiming to hold (referred to as the ‘short-term landbank’ in the table above) in terms of their current building rate (the number of homes completed that year): Barratt aim to hold 4.5 years’ worth of current supply; Persimmon aim to hold 5 years’ worth of current supply; and Taylor Wimpey described their current level, 5.7 years’ worth, as “optimum”.52

45.DCLG said there were “strong financial incentives” not to sit on land with permission as once acquired, the planning permission often has an expiry date after which the firm would need to reapply.53 Jennie Daly said that firms “are incentivised to get building because only through building will we get a return. The housebuilding model does not sit well with land hoarding.”54 Lord Kerslake said that if you accused housebuilders of being too cautious, “they will point to the fact that a good number of them are still rebuilding their balance sheets after the near death experience of the financial crash”.55

46.Ms Daly did however clarify that Taylor Wimpey take into account the effect that the rate of delivery of new houses has on prices:

“where there is not the depth of market, there would be concerns about overprovision into the market and the fact that that would have a distorting effect on the local market. That would be of concern both to the local market property owners and to us.”56

47.The Local Government Association published figures in February 2015 that indicated there were 475,000 homes in England that had been given planning permission but had yet to be built.57 Isobel Stephen, Director for Housing at DCLG, said the “drop-out rate” between planning permissions granted and homes actually built was “around a third”.58 The Minister for Housing told us the “challenge” for his Department was reducing this gap.59

48.These planning permissions however are not necessarily in the hands of developers. John Stewart from the Home Builders Federation said that research from a few years ago found that “virtually all” sites with a permission that had not started were owned by non-developers. He said more data was required:

“we need to understand properly … whether there are non-developers who get permission for reasons where they never intended selling for development.”60

49.The Government should assess why there is a large gap between the number of planning permissions granted and the number of homes actually built. In particular it should identify who is holding permissioned land that is not developed.

Alternatives to traditional housebuilding

50.Many witnesses also questioned whether builders could make greater use of alternative methods to traditional housebuilding such as off-site construction. Lord Best, former President of the Local Government Association, said “we have to get into this. In other countries there is lots more standardisation and modern methods of construction.”61

51.Non-traditional methods have been tried before in the UK. Dr Clive Skidmore, Head of Housing Development at Birmingham City Council, said that many non-traditional construction homes were built in the 1920s, 1930s and 1950s: “I have spent 20 years knocking most of those down, because they did not last very long.”62 He acknowledged though that there was “potentially” a role for that form of construction.

52.Since the 1980s we have been relying on the private sector to provide the homes that are needed. The sector, especially since the financial crisis, has all the characteristics of an oligopoly: there are high barriers to entry and the large housebuilders are responsible for a substantial proportion of output. It is rational for private enterprise to optimise profits rather than volume, limiting their uncertainty in a market characterised by constant Government intervention and cyclical risk. The sector is largely focused on building for sale and is not providing for the rental sector which is over a third of the market.

53.The Department for Communities and Local Government told us it is examining incentives to get the private sector building more homes. Encouraging smaller builders back into the market and promoting greater use of modern construction techniques may help. But the Government cannot rely on the private sector alone to build the homes the country needs. The gap between what can realistically be expected and what is needed is simply too large.

Public sector housebuilding

54.Many witnesses pointed out that since the Second World War, the level of building required to meet the present Government’s target (200,000 homes a year) has only been achieved for a prolonged period when there has been a substantial contribution from local authority building programmes. This is illustrated in Figure 1 above.

55.As local authorities no longer receive central government funding for housebuilding, most of them must now borrow to fund the construction of new homes. Chapter 5 considers ways that funding for local authority housebuilding could be increased.

56.Local authorities and housing associations need to make a much bigger contribution to housebuilding if it is to reach required levels.

Public policy changes and volatility in the market

57.Dr Peter Williams of the Cambridge Centre for Housing and Planning Research said that volatility in the market left private builders hesitant to build:

“Even if we can have bold targets in terms of output, it does not necessarily mean, with a speculative demandled housebuilding industry, we will see that supply follow.”63

58.Witnesses pointed to changes in Government policy as a source of that volatility. David Orr, chief executive of the National Housing Federation, said the reduction in social rents had created “flamboyant uncertainty” for housing associations:

“If the Government and the nation want housing associations to make the best contribution that they possibly can, avoiding introducing such areas of uncertainty without consultation would have a considerable impact.”64

59.Dame Kate Barker said her “favourite point” to make about housing policy is that it is “totally un-joined up” between the Bank of England and the various Government departments who have an interest.65 She said this was apparent in the contrast between “the drive for home ownership” from the Government and “the drive to keep leverage down” in financial institutions from regulators.66

60.The New Economics Foundation also questioned the effects of macro prudential policy on the housing market. They said that the Government and Bank of England should “mandate a refocus of the banks and the wider economy on productive investment, including the building of homes.”67

61.Government must recognise the effect that constant changes in public policy have on the housing market; housebuilders, housing associations and local authorities are unlikely to commit to large building programmes amid such uncertainty.

62.The construction of houses is affected by macroeconomic policy. Nevertheless a robust programme of continuing, uninterrupted development by local authorities, housing associations and private investors in the rental sector would provide a more stable output of new homes across the economic cycle.

Existing housing stock

63.The vast majority of homes that come onto the market for sale are existing homes. The number of transactions on existing homes halved following the financial crisis and has only partially recovered, as shown in Figure 8.68

Figure 8: Second hand homes versus new build homes, England and Wales, 1978 to 201469

Line chart showing second hand houses versus new builds in England and Wales from 1978 to 2014

Source: Office for National Statistics, ‘Economic Trends Annual Supplement’, 2006: [accessed July 2016]; HM Revenue and Customs, ‘Annual UK Property Transactions Statistics’, June 2015: [accessed July 2016]; Department for Communities and Local Government, ‘Live Tables on Housebuilding’, May 2016: (Tables 13 and 14) [accessed July 2016]

64.Paul Johnson, Director of the Institute for Fiscal Studies, said low turnover was a problem: “the lack of willingness to sell, despite the extraordinary prices around, is creating a lack of supply.”70

65.The Council of Mortgage Lenders pointed out that even if 220,000 plus homes are built every year for the next decade in England, 90 per cent of the housing stock that will exist in 2025 has already been built. They called for better use of that existing stock:

“Government measures that nudge us towards even slightly more intense use of our current stock could contribute materially to improving the overall supply-demand picture.”71

66.Lord Kerslake however said he did not buy the argument: “the fundamental issue is about more homes. It has been since Kate Barker wrote her report and it is an even more acute issue now.” He conceded measures to encourage moving may “ease the challenge of supply” but thought it was “unrealistic to think that it will tackle the underlying need for housing in this country”.72

67.The price of housing is determined by the balance in demand and supply for the entire housing stock rather than the supply of new homes alone. A higher rate of construction will need to be sustained over many years to have a substantial effect on prices.

Barriers to downsizing

68.‘Under-occupation’ of housing is currently defined by the Government as a household having two or more bedrooms above the required number of bedrooms for the people living there.73 At present, 51 per cent of owner-occupier households in England (7.3 million) are under-occupied according to this definition.74 This has increased from 39 per cent (5.3 million households) in 1995/96. A number of witnesses highlighted this point.75

69.Vicky Chapman, who together with her husband is looking to move to a smaller house, bemoaned the lack of suitable property:

“Houses being built by developers are badly designed (two flights of stairs!), overcrowded, overlooked with small windows, small rooms and small gardens and high prices … What we do not want is to live in a rabbit hutch (we would like the same sized rooms but less of them) just because we are getting on a bit and neither do we wish to live in a commune of old people.”76

70.Stamp duty was criticised by a number of witnesses for discouraging people to move home. Paul Johnson thought it was a “quite important” factor behind the low turnover, saying the tax payable “is a much bigger fraction of the cost of a house now than it was back in the 1980s”.77

71.The National Institute for Economic and Social Research (NIESR) said that under-occupation suggested that housing is “increasingly seen as a store of wealth … the market is becoming less efficient in allocating housing”. They labelled the tax system as “the biggest distortion” to the housing market and called for capital gains tax to be levied on profits made on main residences.78

72.The existing stock of housing in England is not used particularly efficiently. While new construction is important, the Government should not overlook the role the existing housing stock plays and consider ways of stimulating the market for existing homes.

13 In June 2016 the Land Registry published a new UK House Price Index that replaced the previous house price indices that were published separately by the Land Registry and the Office for National Statistics (ONS). The new index included house purchases that were previously excluded (such as cash purchases) and calculated average house prices using a geometric mean rather than an arithmetic mean (a geometric mean is less distorted by high values and more in line with international best practice). Average house prices calculated using the new method are substantially lower than in the previous ONS index (the average house price for England and Wales in March 2016 was £216,000 using the new method and £301,000 using the old ONS method). The new UK House Price Index will be backdated to 1968 eventually but for the purposes of drawing historical comparisons today, this report will use average house price data from the previous ONS house price index.

14 Gross weekly income.

15 Over the same period, data from the Council for Mortgage Lenders show that mortgage costs have decreased as a proportion of income for first time buyers over this period (see Table 8 in Annex 1). This is likely to be due to historically low levels of interest rates as well as the shift towards first time buyers coming from the higher end of the income distribution.

16 The chart splits first time buyers by income quintiles for the whole population—the first income quintile is the lowest 20 per cent of incomes, the second income quintile is the next 20 per cent of incomes and so on. A person earning the median gross income would be in the third quintile.

17 When housing benefit is included it is added to income. The ‘household reference person’ is the person in whose name the dwelling is owned or rented or who is otherwise responsible for the accommodation. In the case of joint owners or tenants, the person with the highest income is taken as the household reference person. Where incomes are equal, the older person is taken as the household reference person.

18 English Housing Survey, Household Report 2013–14, July 2015 Annex Table 4.3: [accessed June 2016] The difference is less marked between London and the rest of the country for social renters: 36 per cent of social renters’ gross income on average is spent on rent in London compared to 30 per cent and 28 per cent in other urban areas and rural areas respectively.

19 Witnesses variously estimated that between 200,000 and 300,000 new homes a year are required today (see Chapter 2).

20 Office for National Statistics, House Price Index, April 2016: [accessed June 2016]

21 See Annex 2. The figures are based on DCLG statistics which use the 2001 Census definition of a household: “A household is defined as one person living alone, or a group of people (not necessarily related) living at the same address with common housekeeping—that is, sharing either a living room or sitting room or at least one meal a day.” DCLG, Household Projections in England 2012–2017, Feb 2015: [accessed June 2016]

22 Ibid.

23 DCLG’s household projections are based on 2012 population projections from the ONS. The 210,000 average annual increase is between 2012 and 2037. The number of households that actually form is dependent on the availability of homes for new households to move into. Ibid

24 Under a ‘high net migration scenario’, 237,000 additional households would be expected each year up to 2037 with 40.1 per cent of those due to net migration.

25 Written evidence from Migration Watch UK (EHM0149). The 2014 release was the latest available at the time the evidence was received.

26 Q 78 (Prof Tony Champion); see also Professor Cheshire (Q 46).

29 Q 43 Professor Muellbauer thought that around two thirds of the rise in UK house prices since 1980 was attributable to rising income per house (Q 83).

30 Q 83 Professor Cheshire stressed that building in line with household projections would not provide enough housing: “The problem with our planning system is that it allocates land on the basis of a forecast of household numbers, not on the basis of a forecast of housing demand or space demand. So we have been systematically undersupplying land since the early 1950s.” (45). Dame Kate Barker made the same point (Q 2).

31 See Professor Muellbauer (Source Q 83)

32 Q 193. Positive Money similarly said bank mortgage lending was one of the “key drivers of rising house prices.” Written evidence from Positive Money (EHM0107)

33 Written Evidence from the New Economics Foundation (EHM0101)

35 Martin Wolf, The Solution to England’s Housing Crisis Lies in the Green Belt, The Financial Times (5 Feb 2015): available at [accessed June 2016] The Cambridge example is taken from Kate Barker, Housing: Where’s the Plan? (London Publishing Partnership, 2010)

36 Q 204 He said it was “more important, probably, than the decline in real interest rates over the last 20 or 30 years.” Professor John Muellbauer, University of Oxford, said that the release of land for building in Germany was one of two “dominant” factors (along with credit liberalisation) in explaining why house prices had not risen as much there as in the UK (Q 83).

37 Q 150 Chapter 3 considers possible reforms to the planning system. These include incentives for local authorities to accept development and allowing local authorities to set their own planning fees, retaining the proceeds to spend on improving planning resources.

38 Net additions includes new build homes as well as conversions, changes of use (for example from commercial to residential) and demolitions.

39 Q 229 Jean-Pierre Schaefer, a Special Adviser to the National Council of Cities in France, told us that new construction in France has been much higher in the UK since the 1970s. He did however say that before the 1970s, new construction in France was low compared with the UK, “that is why it is very difficult to compare countries: because our histories are sometimes quite different.” (Q 229).

40 Q 104 The Federation of Master Builders said in written evidence that a firm building fewer than 500 units a year was a “rough approximation” for medium-sized firms and smaller. (Written evidence from The Federation of Master Builders (EHM0140))

41 The difficulties the planning system poses for smaller builders are discussed further in Chapter 3.

43 Written evidence from the Royal Institute of Royal Planning Institute (EHM0121) Isobel Stephen told us that the eight largest housebuilders accounted for 50 per cent of new homes built (Q 62).

45 Q 102; see also Q 113 (David Orr).

46 Randstad, ‘Age of house building will demand a million more construction workers’: [accessed June 2016]. Some witnesses also mentioned the rising cost of building materials. Dr Peter Williams said this would “massively constrain” the supply response (Q 30) and Dame Kate Barker pointed out that manufacturers of materials and required trades had gone out of business in recent years. (Q 1).

47 Martin Wolf said “You cannot tell me that we cannot build a few houses within five years if we really want to. It is a question of making it credible to the industry that that is what is going to happen.” (15).

48 For example, David Turver in written evidence said that “Under delivery is down to tactical decisions made by the housebuilders to maximise profits.” (Written evidence from David Turver, EHM0015)

49 The phrase ‘short-term landbank’ is used to refer to plots of land that are ready or close to ready for building on.

50 Persimmon’s 2015 Annual Report said it had 93,649 plots in its land bank but of those 54,300 plots had ‘implementable planning consent’ and around 30,700 plots had outline planning consent. (Persimmon PLC, Annual Report 2015, December 2015: available at [accessed June 2016])

51 As well as the ‘short-term landbank’, housebuilders also hold land in what is referred to as the ‘strategic landbank’ or ‘strategic pipeline’; this is land where generally the process of applying for permission to build has not started.

52 Annual reports, op. cit.

53 They said the default was three years. Written evidence from DCLG (EHM0157).

54 Ibid.

55 Q 143 Professor Steve Wilcox said this reflected a “natural caution” within the industry: “you are doing a new product virtually every year, you want to ensure that you have a business that is sustainable over a run of years.” (Q 31).

56 Q 95 This was echoed in Persimmon’s 2015 Annual Report: “We control the level of build on-site by closely managing our work in progress levels and matching supply to demand.” Persimmon PLC, Annual Report 2015, December 2015: available at [accessed June 2016]

57 Local Government Association, ‘475,000 homes with planning permission still waiting to be built’, January 2016: [accessed June 2016]. In their additional written evidence to the Committee, DCLG pointed out that this figure included sites where work had already started. Written evidence from DCLG (EHM0157).

61 Q 138 Dr Peter Williams said that other countries have shown using modern methods of construction can be done successfully, he said it does have “potential” (Q 30).

65 Q 13 Dame Kate cited the Department for Communities and Local Government, HM Treasury and Department for Work and Pensions.

67 Written evidence from the New Economics Foundation (EHM0101)

68 The relative importance of transactions on existing homes compared to new builds was explored in an article for The Economist’s Free Exchange blog in February 2016:

69 Pre-2006 statistics on property transactions are do not differentiate between residential and non-residential transactions. The graph therefore displays all property transactions, the vast majority of which are residential transactions (between 2006 and 2014 there was an annual average of 897,000 residential transactions which accounted for 95 per cent of the average annual number of transactions (947,000) over that period.

71 Written evidence from the Council for Mortgage Lenders (EHM0064)

73 To measure occupation density, a standard number of bedrooms is calculated for each household. A separate bedroom is allowed for each married or cohabiting couple, any other person aged 21 or over, each pair of adolescents aged 10 to 20 of the same sex, and each pair of children under 10. Any unpaired person aged 10 to 20 is notionally paired, if possible, with a child under 10 of the same sex otherwise they are counted as requiring a separate bedroom, as would any unpaired child under 10. This notional standard number of bedrooms is then compared with the actual number of bedrooms available and the difference calculated. Bedrooms converted to other uses are not counted as available (unless denoted as a bedroom in the Census by the respondents).

74 DCLG, English Housing Survey, Headline Report 2014–15, 18 February 2016: [accessed July 2016].

75 For example, National Institute for Economic and Social Research (EHM0061) and Green House Think Tank (EHM0129). Over the same period, the proportion of under-occupied homes has decreased in the private and social rented sectors.

76 Written evidence from Vicky Chapman (EHM0023). Chris Walker from Policy Exchange said that many older people wished to move into a smaller house “but they do not have a suitable alternative to which to downsize. It is almost like a bit of a gridlock in the housing market.” (Q 2).

78 Written evidence from the National Institute for Economic and Social Research (EHM0061)

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