Property is a somewhat sticky subject in the UK. Rampant rises in property values in the midst of the Covid-19 pandemic priced many first-time buyers out of the market once again, before historic rises to interest rates – designed to combat the cost-of-living crisis – caused the cost of mortgages to rise.

Despite all this, demand for housing remains high in the UK. But recent government figures have shown that housing supply at present falls dramatically beneath the amount estimated to be required in the UK. What are the figures that indicate this, and why exactly is it that housing supply is lagging so far behind demand?

Ideal Figures for New Housing Supply

According to figures supplied by the government in their report on the under-supply of housing at the start of 2022, around 340,000 homes should be supplied in England alone on an annual basis. Further, 145,000 of these homes should be ‘affordable’ in nature, in order to stimulate the economy in a more sustainable and equitable manner. The actual figures for supply indicate a shortfall of over 100,000 homes per year.

Where Are Homes Being Built?

Of course, the shortage is not a complete draught. Homes are indeed being built, and built across the country – just at a rate well below that required to feed today’s demand. Not only this, but there is something of a disparity in home-building rates between regions of the UK, with some areas seeing significantly more construction and supply than others. Pre-pandemic data indicated that London saw the most homes built outright between 2011 and 2020, while Cambridge saw the largest relative increase in home completions.

Why is Supply Behind Demand?

The reasons behind the discrepancy between supply and demand are many and varied, but there are some key factors that hold particular import at the present moment. One such factor is raw materials.

Timber and timber products are essential provisions for house construction, whether sheet products for concrete framing and interior fitments or batons for studs and roof structure. Intermittent shortages in timber price, coupled with the falling value of the pound sterling against other currencies, have made basic materials both more expensive and harder to come by – in some cases halting construction where companies did not have the cashflow to continue. Another key factor, unavoidably, was the coronavirus pandemic.

Extended periods of lockdown and restricted gathering made construction projects untenable in even the medium term, prolonging construction projects and planning by extremely long periods of time. Construction businesses were challenged to stay afloat during the pandemic, and not all did. As a result, there is still something of a black hole in the middle of the construction industry that has yet to be filled – and many others are still slow to ramp back up to operational speed even a year on from the pandemic’s informal end.