We don’t know exactly how many houses we are building

The residents of East Lindsey must have been in for quite a surprise last year. In terms of social development, there were, as previous figures stated, around 390 houses being built each year in their large rural county of Lincolnshire, around around Skegness seafront; it was 2,330.

However, even from the top of The Odyssey – the longest local theme park – you would have struggled to see any sign of these new homes. : no more overhead cranes or roads full of trucks. No boom among the inhabitants of that place, or. So where are they?

An in-depth analysis of public data reveals a clue: the report captured a large number of holiday caravans parked along the North Sea coast, which increased the number of homes.

It is not clear whether these holiday caravans are responsible for all of the increase or whether there was an undercount in earlier data, or some sort of issue, but it points to an unfortunate and unfortunate reality. often overlooked: we don’t know exactly how many new homes. we build every year in England. And the number depends on who you ask.

For a government with a clear target to build houses – 1.5mn new houses by 2029 – this is a problem. And it represents another sector, including immigration and employment, where the quality of official statistics is very poor.

If you go to the Office for National Statistics website and download its house building data for England, you will be following a long line of politicians, journalists and even housing academics using the data. unfit for purpose. Even if you look for the original source – the Ministry of Housing, Community and Local Government – you will end up in the wrong place if you click on the wrong link: the most used data for the construction of houses in this country is actually less than the completion of new construction. , and with a lot of money.

The ONS figures are based on building control figures, a market historically dominated by the National Housebuilding Council (NHBC) – the body set up to provide guarantees on new homes due to concerns about poor build quality. in the 1930s. However, over the past few decades, NHBC’s market share has declined – from 85 percent to around 60 percent. Although building control data has improved slightly since 2017, by making it independent of NHBC data, the lower figure remains.

There is a stronger number of new homes, announced as part of the government’s housing addition (NAD) reports. This allows us to understand both the scale and spatial extent of the building control data. For example, it shows there were around 158,000 results across England in the 2023-24 financial year, while the NAD’s correct data shows there were 199,000 – a difference of 25%, or 40,000, equal to Bath.

The minimum number is large in areas with a wide variety of home builders. Although the long-term trend is one of the growing forces of large house builders, the market has really changed a lot in the last decade. In many areas, there has been an increase in activity in everything from small house builders and housing associations, to building ​​rental investors and luxury developers – at least until interest rates begin to rise. And it seems they are looking elsewhere for their building warranties.

This means, for London, the building control data is very inaccurate. For 2023-4, NHBC figures show there were around 16,000 new builds, while NAD figures show there were more than 28,000 – the Authority’s most comprehensive figures Greater London says there have been around 32,000 results. So it seems building control data is missing for almost half of the London housing market!

In markets that are still dominated by traditional house builders – for example, suburban developments, building control data is still very useful. Although, even in places like Milton Keynes, where there has been a good relationship between building control and NAD information, there are signs in recent years that it may be failing, when developers those who build​​​​​​and rent and others enter.

England is not the only country struggling to calculate the number of houses in its building: Ireland has oversupplied houses in the past as it relies on electricity connections to calculate new properties. Cowsheds, outhouses and vacant homes that are being repurposed contributed to high numbers of housing supply. When the system was updated in 2018, it reduced that number by 58 percent.

Measuring how many houses we build is not only important because of the government housing goals (which are actually based on total contributions, a measure that includes changes in use and conversions). Understanding who is building new homes and where is important to ensure that policies are fit for purpose – not just to achieve a target.

It can also affect your investments. An increasing number of UK pension funds are investing in residential property, particularly in the rental market. Lack of accurate public information about who is building what and where can lead to their investments not performing as expected. Meanwhile other organisations, including one major, listed builder, have repeatedly spoken out about poor data from the Building Control Authority in London to highlight the huge housing shortage in the capital. The scale of the supply shortfall is still large but not as large as they often suggest.

While the NAD data is a clear improvement on the BC numbers, even this is not perfect. It is only published annually and with a delay of eight months. As London’s GLA data shows, the lack of historical updates before 2019-2020 means that the data may be less complete as some take longer to register. We also don’t know exactly how far back that low number goes. The late Dr Alan Holmans, a housing statistician, expressed doubts that housing completions in the 1990s – and possibly even earlier – were fully recorded.

To address missing completion, NAD data is updated every 10 years with the latest public release. However, we don’t know if the houses that were lost were new buildings or from another source, and we don’t know what other houses they were or who built them – that’s why it was rather chaotic in East Lindsey, where the number of houses has been increased. the total was a third of the national adjustment of 5,890 households per year between the 2011 and 2021 censuses.

If nothing else, it shows that if the government really want to crack down on this house building parliament, maybe they should focus on building holiday caravans outside of Skegness.

Neal Hudson is a real estate analyst and founder of BuiltPlace consulting