Housing market

The number of households in England is predicted to rise by 5.8 million by 2033 – with an extra 232,000 new households forming every year. This increase will be driven by population growth and changing family structures – there is projected to be a large increase in the number of people living alone. However, the economic downturn led to an abrupt halt in new house building - meaning that it is not clear whether enough new homes will be built.

The harsh economic climate also ended a decade of booming house prices. Average prices fell by a record 16% in 2008, but have been rising, albeit slowly, since April 2009. There are also regional differences with prices rising faster in the South East and London than in other parts of the UK.

While the majority of houses are owner-occupied, an increasing share of the housing market consists of privately rented accommodation – up from 9% in 1999 to 14% in 2008-9.  There has been a small decline in the share of socially rented accommodation – housing associations are housing more people while public sector provision continues to fall.

What are the implications?

  • A shortage of housing if rates of house building do not increase significantly.
  • The house-price fall may have left some home owners in negative equity and at risk of repossession if they can’t keep up their mortgage payments.
  • Inflationary pressures may instead build pressure for the BoE to raise interest rates once the economy picks up slightly exacerbating the problem by increasing the cost of mortgage repayments (see inflation).
  • Potential decrease in the levels of personal debt as the aftermath of the credit crunch limits new lending and existing owner-occupiers pay off their mortgages.
  • Increased wealth inequality as some sections of the population are excluded from the property market.
  • Prohibitively high mortgage deposits for first time buyers may impact on levels of consumer spending.
  • The stall in new house purchases, and the ageing population will mean that older people own an increasing share of the housing stock.

Moving forward:

  • What will the long term trends in the housing market mean for your beneficiaries? If there is a shortage of housing will charities providing housing face an increasing demand for their services? Will overcrowding and homelessness be more of an issue in future?
  • The increasing number of single person households might change the nature of social need. Some of these households will be asset-rich but income poor - what will be the appropriate way for VCS organisations to meet their needs?
  • The housing market is closely linked with levels of personal debt and with poverty and inequality. If these are issues that are important for your organisation to respond to, take a look at those drivers to explore implications and potential actions.
  • In the short term, this may be a good time to invest in buying premises for your organisation if you have the necessary capital. Similarly, is it possible to renegotiate your rent if you are in an area with a surplus of rental properties on the market?

Want to know more?

Housing market recessions and sustainable home ownership

Published by: Joseph Rowntree Foundation – a think tank

Date: July 2008

Format: PDF (536KB)

What is it? A review of the current evidence on housing, with a bias to social justice.

How useful is this? This is a good report, with clear discussions of the challenges faced. It also provides policy recommendations and an excellent list of references.

Other comments:

Recession tracker: reposessions

Published by: BBC

Date: n/a

Format: Web

What is it? Data on repossessions in the UK.

How useful is this? The tracker is very accessible with graphs to illustrate the trends.

House price index

Published by: Communities and local government, a government department, based on ONS data

Date: Monthly

Format: Web and PDF

What is it? Monthly updated data on UK house prices including breakdowns by country and region.

How useful is this? There is an archive back to 2006.

UK Housing Review - Briefing Paper

Published by: Chartered Institute of Housing – a professional body for people involved in housing and communities

Date: June 2010

Format: PDF

What is it? A summary of the latest thorough review of housing market in the UK.

How useful is this? This is ideal if you are carrying out a more detailed analysis of housing. It covers all topics - not just house prices for owner occupiers, but also the social housing market and the private rental market. It looks at key indicators such as the mortgage market, the level of deposits required for first-time buyers and provides an overview of the challenges facing housing policy makers and a summary of future prospects for the housing market.

Household Projections: 2008 to 2033

Date: November 2010

Format: Web / PDF

Published by: Department for Communities and Local Government

What is it? The official predictions of the future number of households, produced by the government (NB: this stats are for England only)

How useful it is? Based on an extrapolation of current trends, this provides estimates of the breakdown of the number of households by age, and number of members of the household. This is the basis for the long term trends identified at the top of this driver.

Other comments: Even more statistics are available from the full publication Housing and Planning Statistics



Last updated at 18:18 Sat 26/Mar/11.

Recent comments

Jemma's picture


NCVO Research Team

I’m interested to know what the impacts of a growing rental sector are for the sector and more widely. For instance, how will rental houses measure up in terms of energy efficiency? What are the incentives for landlords and tenants to be more energy efficient? Also as more people rent, will more support be needed to help both tenants and landlords know their rights and settle disputes?

Karl's picture


Third Sector Foresight

I wonder if the answer to this question lays not so much in the implications of a bigger rental market per se, but the implications of some parts of the rental market getting larger. In particular, the private sector is gaining a foothold in the provision of social (i.e. rented) housing as government (specifically the Housing Corporation) creates a mixed economy of providers including the private sector. David Mullins (well worth googling if you are interested in housing and futures) and Bruce Walker argued last year that the hoped for improvements in efficiency from this move might drive up innovation and drive down price.

The implications for the third sector therefore of a larger rental market with more players are pressure on price (whatever the ‘full cost’) and the need to respond to more efficient practices. See Mullins and Walker’s presentation here

More broadly, I wonder if some implications are a greater distinction between the haves and have nots in society, with the haves being the house owning majority? And I wonder what the implications are for engagement and social capital? It might be interesting to look at (for example) census data and see what correlates with rented accommodation housing status.

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How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?

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