UK Fails to Hit Housing Targets as Perfect Storm Hits Affordability and Deliverability

According to new research from global real estate firm CBRE, the UK has consistently “failed to meet housing targets” and has undelivered between 1.5 and 2.5 million homes over the last 20 years relative to the targets recommended.

UK fails to deliver 1.5 to 2.5 million homes in 20 years

First published in March 2004, the Barker Review of Housing Supply report outlined a necessity to increase the delivery of new homes in England by between 70,000 and 120,000 each year to “help lower the rate of house price growth and mitigate issues of market volatility, reduced affordability, and macroeconomic instability”. Written by economist Kate Barker, the report presented recommendations to the UK government that would help secure the future housing needs of the country and aid in preventing the housing market from hitting an affordability ceiling and pricing out buyers.

According to the latest research commissioned by global real estate firm, CBRE, in their ‘Twenty years on from the Barker Review’ report, the UK has failed to deliver between 1.5 and 2.5 million homes relative to the numbers initially put forward in the review in 2004.

The average UK deposit for a home increased by 135% in 20 years

In the 20 years since Barker’s review, while the real average annual house price growth has decreased, in addition to the millions of undelivered homes across the UK, affordability has worsened, and the number of owner-occupiers in the market has plummeted.

Since 2003, the average house price has increased from £139,000 to £302,000 with the average mortgage repayment per month increasing from £637 to £1327. In the same period mortgage rates as a percentage of yearly income increased from 35% to 44% and the average deposit to purchase a home rose from £45,800 to £107,800.

Planning application approval has “continuously slowed in the last decade”

In addition to the proposed recommendations in Barker’s report related to the number of homes needing to be delivered across the UK, there were several recommendations centred around how to make it much easier and faster for developers to gain planning permission to boost development activity within the market.

However, according to CBRE’s report, planning decision speed has “continuously slowed in the last decade” with just 20% of major planning applications being decided within a 13-week timeframe in 2023, compared to a staggering 60% in 2012.

To learn more about the current state of the UK property market, speak with one of our expert team today by calling directly at +44 (0) 161 791 4600.