Ask a millennial in the UK in 2024 what distinguishes them from their parents’ generation and it is likely that a single-word answer will crop up: housing. Since 2010, despite a succession of government pledges to would-be homeowners, the average age of a first-time buyer in the UK has risen. Meanwhile rents have soared, homelessness has more than doubled and housebuilding targets have been repeatedly missed. Here, as part of our wider series on how 14 years of Conservative party rule has changed Britain, we look at some of the key datasets around housing. This article necessarily focuses on England because many housing matters are devolved to the Welsh, Scottish and Northern Irish governments.
Owning a home has become harder
Owning a home “has got harder” under the Conservatives. That’s not a quote from a Labour party attack advert – but Rishi Sunak in a recent election interview with the BBC (he went on to say he would like to make it easier again).
When David Cameron entered Downing Street two years after the 2008 house-price crash, the median house price in England stood at 6.9 times full-time employees’ median annual earnings: in 2023, it was 8.3 times. London in particular has become much more unaffordable since 2010: the median property price was 12.7 times the median Londoner’s earnings last September. It would be unfair to lay all of the blame for unaffordable housing at the door of the Tories – it has been two decades since a mid-range-price house in England was less than five times median household income (a different metric from the full-time-earnings ratio mentioned above) and prices rose much faster than income under New Labour. But – outside the 2008 housing bubble – the middle-earning household could still afford to buy a house in the cheapest 20% of the market. That changed in 2021 when official data confirmed that the middle classes were being squeezed yet further, with only the cheapest 10% of houses now affordable to the middle-earning household.
Renting a home is more expensive
Both prime ministerial candidates have said they want a younger generation to experience the feeling of getting the keys to their first flat. But house prices aren’t the only blocker on home ownership because rents are increasingly eating into would-be-first-buyers’ ability to save for a deposit.
The Office for National Statistics’ private rents index shows that renting in England is now 50% more expensive than 14 years ago, with the average rental price in London reaching a record level of £2,035 a month in February 2024. The cost of renting has increased across all the regions, but there are differences. While the rise in London and the south-west has gone above 50%, average prices in the north-east have gone up by 28%. This data covers all rents and not newly advertised properties, which means that for those newly renting or moving from one rented dwelling into another costs have probably risen by even more.
Not enough houses are being built
Part of the reason for rising unaffordability – for buyers and renters – is a lack of supply.
Successive governments have missed their building targets: David Cameron did not keep his promise of providing 200,000 new “starter homes” – aimed at first-time buyers under the age of 40 – in 2015. The National Audit Office said that, by the end of 2019, no such homes have been built. Theresa May made housing one of her main domestic priorities, most significantly in her 2018 party conference speech, when she announced measures designed to allow councils to borrow more to build up to an estimated 10,000 more homes a year; a welcomed, if modest target which, again, wasn’t met. Boris Johnson’s 2019 manifesto promised 300,000 new houses a year in England by the mid-2020s, although less than two years later, the then housing secretary Robert Jenrick admitted they would miss it by “a country mile” (the lastest figures show it’s 22% below target). And where local authorities once provided a sizeable amount of newbuilds – which made up close to 40% of new builds in the 1970s, the private sector is now dominant. It has built more than 80% of new housing stock since 2019 with just 1% coming from local authorities (the balance comes from housing associations).
“Affordable” rent has replaced social rent
One of the early acts of the coalition government was the introduction of affordable rent – a new type of way to rent a property from a housing association with a monthly cost higher than social rent but lower than the market rate. It was introduced in 2011 as part of the government’s austerity measures to help housing associations raise money after a huge cut to their funding. It has turned out to be affordable in name only in many parts of England and has all but killed off building for social rent.
Social rents are calculated taking into account local earnings and property values, while affordable rents can be up to 80% of the going rate in the private rented sector, and are typically set at that level. In 2022/23 the median weekly social rent hit £89, the equivalent figure for affordable rents was £134. That’s across England as a whole: in some parts of the country, affordable rents are double social rents, according to analysis by Inside Housing magazine. And since the new type of rented housing was launched, the number of homes being built for social rent has plummeted. While 39,562 homes for social rent were completed in 2022/23, the last year for which data is available, there were 9,561 new homes at that rent level, while 24,303 were created for the more expensive affordable rent.
Homelessness has risen
While rough sleeping is the most visible form of homelessness, it is also the hardest form to enumerate. The annual rough sleepers count – which is conducted by individual councils that use a mixture of headcounts and estimates reached by relevant local bodies – only provides a “snapshot” of one night in autumn (and not even the same night in autumn, as councils have a two-month window to do it).
Homelessness is, however, a much broader problem than rough sleeping alone. To get a better idea of the true scale of homelessness in England, it is useful to look at the number of households classed as statutorily homelessness, meaning they lack a secure place in which to live. These numbers more than doubled under successive Conservative governments and the number of households living in temporary accommodation surpassed 112,000 in the last quarter of 2023. That’s a 12.1% rise in a year, the highest-ever figure and well over double the comparable 2010 figure. Charities also point to “hidden homelessness”: people living in squats, hostels or B&Bs, in overcrowded accommodation or “concealed” housing, such as the floors or sofas of friends and family who are not counted in this total.