Housing shortage set to drive up prices

England and Wales face a shortfall of more than 250,000 homes over next four years. 

Residential property prices in England and Wales look set to rise further as developers continue to struggle to develop enough new homes to meet growing demand from buyers and renters.

A new report published by planning consultancy Turley shows that England and Wales face a shortfall of more than 250,000 homes over next four years, which is likely to place upward pressure on property values.

The report reveals that according to approved plans, England and Wales will require at a minimum 1,197,000 new homes over the next four years. The report also reveals that Local Planning Authorities (LPAs) claim to have land available for in the region of 939,000 of these properties, leaving a major shortfall of at least 258,000 homes.

Local authorities are required under the National Planning Policy Framework (NPPF) to identify and update annually a supply of specific deliverable sites sufficient to provide five years’ worth of housing against their objectively assessed housing requirements. But Turley claim that their research report shows that at least 211 of England and Wales’ 318 planning authorities fall short of their five year land supply targets.

The greatest shortfall, excluding London, is in the East Midlands, followed in order by the North West, South East, Yorkshire and Humberside, West Midlands, the East, South West, North East and finally Wales.

“The majority of LPAs are falling short of their minimum five year housing land supply requirements, and this has significant implications for the pace of economic recovery. It is also likely to impact affordability for first time buyers wishing to enter the market,” explained John Acres, director, Turley.

Acres explained that the research represents a ‘best case’ scenario, suggesting that the housing shortfall in England and Wales could potentially be even greater. So unless consent is swiftly granted for new residential sites, property prices will almost certainly rise in parts of the country, particularly in those areas where the shortfall is most acute.

“The substantial shortfall is, however, only likely to deteriorate as annual dwelling delivery rates remain below those needed to meet the overall requirements across England and Wales,” Acres added.