Social housing stock among England’s northern local authorities is set to plummet by an additional 30% by 2040 compared to their southern counterparts, groundbreaking research by socio-economic experts at Marrons has unveiled.
The latest figures show that only 16% of the 295,197 social rent properties owned by local authorities and registered providers that were sold or demolished nationally between 2015/16 and 2021/22 have been replaced. If this continues at its current level, it will result in a net loss of 385,887 homes by 2040 — 218,461 of which will be in the north of the country.
Out of the top 20 local authority areas due to witness the most significant losses, 13 are situated in the north, with the remaining seven being Greater London Boroughs. A southern council outside of the capital does not feature in the list until Plymouth in 27th place, followed by Bristol and Southampton in 32nd and 36th place, respectively. Once Greater London is discounted from the equation, the north-south chasm deepens further to 165%.
The figures come following the release of the Office for National Statistics’ (ONS) affordability ratios, which showed that just 7% (23) of local authority areas in England had homes selling for less than five times the average earnings of workers in 2023. In 1997, when the data was first recorded, 88% of areas had this ratio.
Utilising the latest ONS Census data (2021) and 2018-based population projections, Marrons has painted a clear picture of England’s housing need in 2040 in its latest report. Supplementing this is data from local authority housing registers, social housing stock records and extrapolated housing requirement figures using the government’s standard method.
Dan Usher, Economics Director at Marrons, who specialises in housing need evidence, said: “England’s social housing stock dwindling by more than 350,000 properties is a harrowing forecast that comes in the wake of alarming surges in council house waiting lists, with more than 1.2 million people being on their local authority housing register in 2023, and affordability remaining considerably worse than in the late-90s.
“The introduction of the Right to Buy scheme, which enabled council tenants to buy their homes for a significantly reduced price, was turbo-charged in 1980. Within five years, half a million council homes had been sold under the initiative in England alone.
“England is losing social housing much faster than it is being built and the losses are mounting up — in fact, according to housing and homelessness charity Shelter, social housebuilding in England being at its lowest rate in decades. Demand is continually outstripping supply, leaving the poorest households with no choice but to enter unaffordable private tenancies — putting them at risk of homelessness.”
By 2040, England’s 16+ population is expected to grow by 6% to almost 50 million people. Notably, Greater London and the East Midlands are the fastest-growing regions — each anticipating 12% growth to eight million and 4.5 million, respectively — while the North East shows the slowest growth at 5% to reach 2.3 million people.
To meet the burgeoning demand, at least 5.4 million homes need to be constructed across England by 2040. The South East leads the way in housing need outside of Greater London, with demand for more than 950,000 homes. In contrast, the North East demands the least, with a requirement of 112,388 properties.
Craig Pettit, Planning Director at Marrons, commented: “We are nowhere near meeting the Government’s minimum housing need of 300,000 properties a year — the average is 215,000 over the past decade — so parliament’s response to its own target is grossly inadequate. However, the obsession with the number is meaningless if hitting targets is prioritised over and above the needs of local populations.
“While the planning system is undoubtedly broken, it is likely a convenient cover up for a much bigger issue. We have the tools, expertise and space to plan properly, but development of any kind has simply become undesirable to the public. The Government-orchestrated rhetoric that focuses on the potential negative impacts of development — rather than taking time to understand the benefits — is wrong.
“If we are going to meet the needs of the population in 2040, we need to prioritise the needs of future residents and start building the right homes today. We must utilise the vast array of data we have at hand to futureproof our villages, towns and cities — taking a long-term view of the issue and offering the appropriate mix of housing types and tenures that caters to the needs of each local population.
“We must alter the common public perception that no new development is considered a ‘win’ and promote a proactive way of planning sustainably, rather than remaining in this never ending reactive cycle, which will only continue to breed discontent with the industry.
“A national housing policy — supported by a proper approach to regeneration, systematic review of green belt and an in-depth understanding of the socio-economic needs of a location — will highlight areas of opportunity and meaningful change. Without this, we will see no movement in the market or developments that do not serve the population’s needs, placing the housing crisis in gridlock.”
While the first-time buyer demographic (aged 25-44) is anticipated to decline nationally by 1.6%, this group will make up 30% of adults in England by 2040. Yorkshire and the Humber (10%), the West Midlands (7%) and the South West (1%) will buck the trend with positive growth among this age group.
Dan said: “Despite a national decline in numbers, this demographic remains a hugely important segment of the housing market. The first-time buyers of 2040 are teenagers and young adults living with their parents today, so they will be completely new entrants to the housing market.
“The consequences of not adequately providing for this segment of the housing market are considerable and will result in many young people moving back into the family home, with delays to household formation and fertility rates in younger adults directly impacted.”
The later living demographic (aged 66+) is set to witness a 37% increase, with the East Midlands experiencing the greatest surge (41%) and the North East demonstrating the slowest growth (29%).
Alarmingly, 52% of properties (4.5 million) occupied by those aged 65+ are projected to be under-occupied by two or more bedroomsv in 2040. The South West is expected to have the highest under-occupation rate (57%), while Greater London is anticipated to have the lowest (42%).
Dan added: “There is no doubting the impact under-occupied homes have on the housing crisis. It is estimated that for each bedroom added to the retirement stock, two to three are released in mainstream housing, so pulling people through the market will increase the number of family homes available.
“Furthermore, older people living in accommodation better suited to their needs improves the quality of their life, while reducing pressure and easing the burden on the NHS and community social care, which has huge benefits for local authorities and government.
“This presents strong opportunities for developers to invest in the later living market and create links between housing associations, investment funds and local authorities to offer greater choice to the consumer in terms of location, style and facilities. However, we also know that even with greater choice there are still many older homeowners who will never move — placing even greater importance on building general market housing.”
