In short supply
What does the latest choice-based lettings data reveal about the mismatch in the supply and demand of social housing?
STRATEGY
Image: Istock
Ninesh Muthiah
CEO and founder, Home Connections
Issue: 63 | December 2022
There is an urgent need for more social housing to meet the needs of a varied and ageing population. But in order to provide more homes, we need to understand the current trends and mismatch between supply and demand and what might be influencing these.
The prolonged shortage of supply makes offering choice a continuous challenge in the housing sector. Housing professionals face immense pressure from a growing waiting list, yet the construction of social homes falls way below the number required to meet this demand. The term ‘affordable’ has become ever more illusory as the near-market rent ‘affordable’ housing remains unaffordable for most people on the waiting lists.
I have noticed that there are very few studies that give insight into the scale of demand for affordable housing. Such studies could help to improve housing supply by aiding decisions by government officials and developers on what types of new social rented properties to build and where. We hope that Home Connections’ new report will help inform these discussions.
Comprehensive analysis
The report, Minding the Gap (in collaboration with Campbell Tickell and the Policy Institute of King’s College London) is a continuation of last year’s analysis of 26,000 social housing properties advertised through Home Connections’ choice-based lettings systems before and during the COVID-19 pandemic.
This year, 50,000 properties advertised in the past three years were analysed, giving a more comprehensive overview of social lettings and allocations across the country as we move on from COVID-19.
The findings give clear indication of new patterns and trends that could be contributing to the widening gap. It revealed that demand for social housing is even greater than in the private rented sector, with some social homes receiving over 1,800 bids (applications). In contrast, a report from Propertymark found that there were roughly five prospective households for every available PRS property in the UK in March 2022.
The report emphasises the need for more social homes that cater for larger families, with demand increasing for larger properties in 2021-2022 but homes with three or more bedrooms making up fewer than 16% of all available properties.
And while London is still the most in-demand area – with an average of 255 bids per property (nearly twice as high as the national average) – the report’s findings give signs of the mismatch spreading to other areas in England. In the South West, for example, demand for social housing increased by 33.3% while the supply level has dropped since 2019.
The report's key findings
- Nearly 4.8 million bids were received for nearly 40,000 properties
- 120 bids on average were received by each social housing property advertised across England
- Fewer than 16% of the available properties had three bedrooms or more
- London is still the highest area in demand with 255 bids on average per property
- Demand in the South West increased by 33.3% while the supply level has dropped since 2019
“Demand for social housing is even greater than in the private rented sector, with some social homes receiving over 1,800 bids. In contrast, a report from Propertymark found that there were roughly five prospective households for every available PRS property in the UK in March 2022.”
Potential solutions
The data collected from Home Connections’ advertising systems makes one thing clear: the mismatch between supply and demand is a national problem.
We hope that landlords and housing developers can use the report’ findings to guide their plans for development and regeneration. And to assess whether existing stock could be allocated differently to meet demand better.
It is evident, however, that the social housing sector cannot fix the issue alone. As mentioned at the outset, we urgently need the new government to commit to significant investment in social housing construction to help alleviate demand for affordable housing.
