What will the long-term impacts of coronavirus be on housing supply?

Kerri Farnsworth
Kerri Farnsworth

Kerri Farnsworth , 09 September 2020

The last NHF Thinkhouse blog for board members came at the beginning of the coronavirus lockdown in the UK. 

We’re now seeing the first in-depth reflections on the effect of the pandemic on housing. The stop-start impact of localised lockdowns – and possibly a further national lockdown – make the recommendations in the following reports even more pertinent.

The first report, Rescue, Recovery and Reform: housebuilding and the pandemic, by Shelter, sets out in very stark terms the impact of the coronavirus crisis on the housing market and the economy – especially given the repeated vulnerability of the housebuilding and construction sectors in previous major recessions.

In summary, a pandemic-induced recession – the worst-ever on record according to the ONS – at a time of an acute shortage of housing completions could lead to:

  • Almost a quarter of a million construction industry job losses.
  • Over 300,000 new homes being lost from the forward five-year pipeline.
  • Almost £30bn lost from the economy.
  • The waiting list for socially-rented homes rising to 1.2m (a queue that could stretch from London to Istanbul).

The report calls for immediate government action by accelerating the current Affordable Homes Programme into a two-year rescue and recovery deal, focusing on the delivery of social-rented housing. It also proposes adjustments to the definition of ‘affordable housing’ to make sure that it really is affordable for most people.

I was particularly struck by the following phrase in the executive summary: “There’s a clear moral argument. Everyone should have a safe and secure home, especially in the midst of a global pandemic. But there’s also a clear economic case. When the private market dries up, government grant in social housing can deliver a direct and vital shot in the arm, protecting jobs, supporting SMEs and building us the genuinely affordable homes we so desperately need.”   

Much of this same sentiment is reflected in the Affordable Housing Commission’s Making housing affordable after Covid-19. The phrase “a broken housing system exposed” is a blunt but brutally powerful summary of where many feel the pandemic has left the English housing market. Modelling undertaken for the report forecasts that the affordable housing gap between supply and demand will grow to half a million within five years. Yet, with the right support, the commission concludes that social housing providers could step in to help distressed private sector development schemes and landlords, and spearhead a scaling-up of new housebuilding – particularly using new offsite and modular construction methods.  Where it diverges slightly from Shelter’s conclusions is that it believes restructured Help to Buy and Right to Buy schemes could play a vital role too.

The third report reflecting admirably quickly and comprehensively on the effects of coronavirus is Lockdown living: housing quality across the generations by the Resolution Foundation (with support from the Nuffield Foundation). This is a concise and focused look at how lockdown has affected different segments of UK society. It finds that, on the whole, older age groups have spent lockdown in larger and higher quality spaces and neighbourhoods. The exception is those older age groups on lower incomes and from BAME ethnicities, who have found themselves at the opposite end of the spectrum in terms of usable space, and quality of their neighbourhoods and living environments. Younger BAME demographics have also been disproportionally negatively affected. Forty per cent of under-16s from a BAME background have no accessible private outside space, and 25% live in an objectively poor-quality environment.

The report concludes that a number of factors have heightened these inequalities, resulting in a significantly more damaging impact on people’s wellbeing and mental health, including:

  • Decades of entrenched failure to replenish social housing stock, combined with poor place-making and build quality.
  • Poor regulation of private rented sector.

The report expresses concern that the possibility of a more comprehensive lockdown in autumn or winter of 2020 will exacerbate this already disproportionally severe negative impact. This point is also shared in an updated foreward to the Design Council’s long-awaited A Public Vision for the Home of 2030, an in-depth study of home design based on over 2,000 people’s ‘experiences of home’ (as opposed to their thoughts on physical bricks and mortar).

These reports are bleak in their analysis, but show that there are solutions – should the government choose to use them.

They are also a tiny snapshot of the 16 reports the Thinkhouse Editorial Panel reviewed in August alone. We reviewed 20 others in May and June, all of which you can find on the new and improved Thinkhouse website.