2.1 billion square metres to swing a cat in
Note: this post has been edited following information received from DCLG about a change in the floor area methodology in the EHS between 2005 and 2006.
Last week I posted a blog looking at what’s happened to the number of houses and the number of households in the English regions over the past 20 years. The main aim was to see if it showed any evidence that rapid house price growth in London since the start of the century was being driven by a shortage of places to live.
Data from two sources suggest that the number of houses in London and the South East has grown significantly quicker than the number of households (and the same appears to be true in other regions). The result has been a growing excess of houses over households that stood at around 200,000 in London in 2015.
But ‘households’ is a slippery concept since the number of them is potentially affected by the availability and cost of housing. To avoid that complexity it’s worth thinking about the housing supply issue at a per person level instead: has living space kept pace with the number of people in the country? If vertiginous house prices are indeed the result of decades of under supply, as frequently claimed, then we would expect to see average residential floor area per person falling.
The English Housing Survey (and its predecessor) shines a light on how these things have evolved over the past 20 years. In 1996 there were 48.5 million people living in England. By 2015 the population had grown by about 13%, to 54.8 million.
But the total usable floor area in English dwellings has grown by around 17% over the same period, standing today at 2.1 billion square metres. More than enough space to swing a few cats. Looked at another way, over the same period, the total number of bedrooms in England has also grown faster than the population: up by 18% to 62.4 million. Much of the expansion in the housing stock relative to population happened in the run-up to the 2008 recession, but space and bedroom numbers have broadly kept pace with population even since then, through the post financial crisis nadir of house building.
More houses, bigger houses?
This expansion in the housing stock is partly because the number of dwellings has grown by 15% over that time. But it’s also because, according to the EHS, the average house is now 1 to 2% larger than it was twenty years ago, rising to 89.8 square metres by 2015 on a comparable measure.
But is all this living space concentrated in the hands of a minority, while ever more people crowd into smaller houses? The survey data suggest not. I calculate that the mean floor space per person per dwelling in England has increased over the last 20 years, by 2 to 3%, to 38.5 square metres per person per dwelling. This is hard to square with the idea that, on average, more people are crowding into houses they’ve outgrown.
How does all this look in London?
Nationally, then, these figures don’t bear out the supply crisis narrative. But if the supply shortage story is true anywhere, it’s in London. So what does the data say there?
On the aggregate measures London appears in a similar position to twenty years ago. The population has jumped by 24% but the residential floor area and number of bedrooms have broadly kept up over the past two decades. Nevertheless, the decline in space compared to population since 2005 certainly fits with the fact that London is the only region where rents have risen in real terms since then.
So while it doesn’t look like the London housing situation has got better, in the way it has elsewhere in England, there’s not much evidence that things have got much worse since the mid-90s either.
To ensure comparability across years when derived variables changed in the EHS/EHCS, dwellings have only been included in this analysis if they have a floor area below 500 square metres, and houses with more than five bedrooms are assumed to have only five bedrooms. These changes do not have a material impact on the absolute numbers, but allow for comparison over time. Floor area and bedroom totals have been calculated by taking the average per dwelling from the EHS/EHCS and applying that to the stock of dwellings.
Following discussions with DCLG I’ve revised the floor area numbers in the above charts and text. This is because a methodological change to the floor area measurement in 2006 means those figures were not comparable with 2005’s. The changes reported above assume that between those years there was no change in floor area (lower-end estimate) or that the floor area changed in line with the average of the 2004–5 and 2006–7 rates (upper-end estimate).