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Britain’s housing stock is ‘worst value for money’ of any advanced economy

  • 25/03/2024
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Britain’s housing stock is ‘worst value for money’ of any advanced economy
Britain's housing stock has the “worst value for money” of any advanced economy on housing cost, floor space and quality, a report has said.

According to an analysis by Resolution Foundation, which looked at actual rents paid versus imputed, it found that those in England would devote 22% of their spending to housing services.

This is higher than the OECD average of 17% and is the highest across the developed economies, barring Finland.

Ireland came close behind in third place, followed by Canada and Israel. All broached the 20% mark.

The report stated that England has the least average floor space per person than many similar countries, at 38m2. This compares to the US at 66m2, Germany at 46m2, France at 43m2 and Japan at 40m2 .

“It is unsurprising that our homes are far smaller than in the US overall, given its land mass, but, strikingly, English floor space per person is no bigger than that of residents of the central city district of the New York metropolitan area, who on average enjoy 43m2 of room,” Resolution Foundation explained.

The firm said that around 4% of British households own second homes for their own use, which compares to 9% in France, 17% in Finland and 22% in Spain.

In Europe, Ireland and Germany are the only countries that have lower rates of homeownership.

England has one of the lowest levels of vacancy rates at 3%, so there is “little evidence that the UK has an abundance of ‘spare’ housing at its disposal”.

Approximately 38% of UK housing stock dates from before 1946, which is higher than the 29% in France, 18% in the Netherlands and 19% in Finland.

“Given that older properties were constructed when environmental standards were either non-existent or far weaker than today, and are frequently harder to insulate than newer homes (for example, often having solid rather than cavity walls), it is unsurprising that UK homes also perform very badly compared to our European peers when it comes to energy efficiency,” the report said.


‘The UK has a long distance to go to catch up with our peers’

Resolution Foundation said if all UK households were “exposed to the full brunt of the housing market, the UK would devote the highest share of overall spending to housing compared to all but one other OECD country”.

It continued: “Currently, the high proportion of outright owners we have in this country makes housing affordability in the UK look relatively benign compared to, say, a country like Germany. But this obscures the housing stress experienced by households who do not own outright, and the multitude of inequalities that housing drives (it is a very strong determinant of overall wealth inequality, for example, and whether one’s parents own housing is becoming an increasingly important determinant in whether younger generations will ever escape the private rental sector).”

The company noted that we often live in “smaller, older and poorer-quality homes in the UK than households in many counterpart countries, and pay a princely amount for that privilege”.

“The UK has a long distance to go to catch up with our peers when it comes to productivity and living standards writ large, and housing has a critical role to play in that process. Bring on the manifestos, where policies to tackle the UK’s housing crisis must surely be centre stage,” it said.

Adam Corlett, principal economist at Resolution Foundation, said: “Britain’s housing crisis is likely to be a big topic in the election campaign, as parties debate how to address the problems of high costs, poor quality and low security that face so many households.

“Britain is one of many countries apparently in the midst of a housing crisis, and it can be difficult to separate rhetoric from reality. But by looking at housing costs, floor space and wider issues of quality, we find that the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy.

“Britain’s housing crisis is decades in the making, with successive governments failing to build enough new homes and modernise our existing stock. That now has to change.”

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