Uk Population Explosion?

[Confounded]

Based on a post by Tired of Waiting I have done a bit of research to help expose the overcrowding/shortage of properties myth.

• Over 40 years UK population has grown by 5 Million according to World Bank data.
  
• This is the equivalent of a125,000 net increase per year
  
• In 2007 we built 167,577 new homes, more than 1.3 homes for every new arrival!
  

The new homes figure above does not include the huge number barn conversions etc which have happened up and down the country.

So even if every new person in the UK population chooses to live on their own we are building enough houses for them. Looks to me that we may actually have an over supply. All the people buying into the propaganda designed to prop up the housing market may be a bit miffed when the dust settles.

[winkie]

Based on a post by Tired of Waiting I have done a bit of research to help expose the overcrowding/shortage of properties myth.

• Over 40 years UK population has grown by 5 Million according to World Bank data.

• This is the equivalent of a125,000 net increase per year

• In 2007 we built 167,577 new homes, more than 1.3 homes for every new arrival!

The new homes figure above does not include the huge number barn conversions etc which have happened up and down the country.

So even if every new person in the UK population chooses to live on their own we are building enough houses for them. Looks to me that we may actually have an over supply. All the people buying into the propaganda designed to prop up the housing market may be a bit miffed when the dust settles.

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

[Darkman]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

Exactly. And ignoring these simple facts amounts to deception.

+1

[Guest tbatst2000]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

And demographic changes meaning that more of the existing people live by themselves than in the past. Examples being:

- more single people in general (divorced and never coupled to start with)

- old people living alone rather than moving in with their grown-up children

- fewer people living in collective housing (e.g. police in section houses, forces in barracks, nurses in hostels etc etc).

- more single mothers

I'm sure there's others.

[winkie]

And demographic changes meaning that more of the existing people live by themselves than in the past. Examples being:

- more single people in general (divorced and never coupled to start with)

- old people living alone rather than moving in with their grown-up children

- fewer people living in collective housing (e.g. police in section houses, forces in barracks, nurses in hostels etc etc).

- more single mothers

I'm sure there's others.

Also many houses in desirable areas stay in families for years often there is little or no debts against them...if the owner wants to move they tend to rent it out or their extended family use it...the only homes that are being created in places of demand are flats not always an ideal long term home for many, but what I would class as a starter home that people are staying living in for longer than they planned.

[JJJ]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

I'd like to point out to newcomers that the "supply" mentioned by Winkie is not supply of houses, but supply of credit to punters. People will spend as much as the bank will lend them, even if it's quite clearly insane.

[Pent Up]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

So assuming there are more than enough houses for everyone as stated in OPs figures. The lack of demand for properties in wrong areas would push the price down in those areas and the overcrowded places would push prices up in those areas. The net effect being the average between the two being something sensible.

It's as simple as just supply and demand. These two factors are completed in themselves.

Supply depends not only on how many properties there are in total but also the willingness of current owners to sell, their liabilties, their desire to move up or down.

Demand depends on availabilty of credit, employment, wages, confidence etc.

[PopGun]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

Oh dear oh dear, you and others still don't get it.

Prices are not only determined by how much someone is prepared to pay, but also how much they're allowed to borrow.

Gone are the crazy days of 2007. Sure there's still good salary multiple deals out there, but these are mostly low LTV ratios and/or subject to strict credit checks. People are being turned down for deals left right and centre, as reflected by the low volumes of transactions.

And yet, prices have failed to respond to the current market forces.

Supply and demand never did really come into HPI ever, it was a false fundamental. If S&D really was so instrumental, every house in the < £300k bracket would be subject to extremely large discounts. Alas they're not, which suggests the S&D market argument constitutes complete and absolute b0llocks.

Edited May 1, 2010 by PopGun

[winkie]

So assuming there are more than enough houses for everyone as stated in OPs figures. The lack of demand for properties in wrong areas would push the price down in those areas and the overcrowded places would push prices up in those areas. The net effect being the average between the two being something sensible.

It's as simple as just supply and demand. These two factors are completed in themselves.

Supply depends not only on how many properties there are in total but also the willingness of current owners to sell, their liabilties, their desire to move up or down.

Demand depends on availabilty of credit, employment, wages, confidence etc.

Sounds good...available credit, transport and employment is very important to price....looking to the future will we all need to live so close to our work? Will technology see that we be able to live further away from the high density hot spots?

[Traktion]

Oh dear oh dear, you and others still don't get it.

Prices are not only determined by how much someone is prepared to pay, but also how much they're allowed to borrow.

Gone are the crazy days of 2007. Sure there's still good salary multiple deals out there, but these are mostly low LTV ratios and/or subject to strict credit checks. People are being turned down for deals left right and centre, as reflected by the low volumes of transactions.

And yet, prices have failed to respond to the current market forces.

Supply and demand never did really come into HPI ever, it was a false fundamental. If S&D really was so instrumental, every house in the < £300k bracket would be subject to extremely large discounts. Alas they're not, which suggests the S&D market argument constitutes complete and absolute b0llocks.

It's not just that - it is too easy to corner the property (land) market, then use it as leverage to extract rent. We need something like a land value tax as well as financial/banking reform; just tackling the latter won't stop the rentier class taking the rest of us to the cleaners.

[Georgia O'Keeffe]

Sounds good...available credit, transport and employment is very important to price....looking to the future will we all need to live so close to our work? Will technology see that we be able to live further away from the high density hot spots?

all of these things supply and demand transport, employment, schools, crime etc are important to relative house prices, the only thing relevant to fundamental house prices is credit supply

Edited May 1, 2010 by Tamara De Lempicka

[winkie]

all of these things supply and demand transport and employment are important to relative house price, the only thing relevant to fundamental house prices is credit supply

...and credit can come from all sorts of sources and from all over the world.

[Confounded]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

This thread is supposed to be data driven, a very poor show so far from the bulls rolling out the normal Bullsh!t

Point 1, show me these areas which have massive oversupply in the wrong areas which has resulted in cheap housing? Supply and natural demand (not speculative credit bubble driven) should have resulted in very cheap housing relative to the national average? Or even a houses priced at normal historical averge i.e an average of 84K (3.5x 22k +10% deposit). Manchester an area accused of oversupply of the wrong types of property, a 1 bedroom flat is still costs £120k and I would not describe that as an average house!

Point 2 please produce data? My point in the original post was that we have not had this mythical population explosion.The myth of shortage of anything increases demand due to the normal hoarding and greed this encourages. This is why every week the BBC runs a piece on the chronic shortage yet provides no evidence of it in an attempt to support prices.

People are constantly told by the propaganda merchants that we have a shortage yet they never provide evidence. I have provided evidence that we have more than met the need of ever new person in the UK even if they all ended up in single person households!

I have lived in property hotspots all round the country over the last few decades (Cambridgeshire, Bristol, Warwickshire, South Devon) all of which seem to have built a huge quantity of all sorts of houses. In the village that I grew up in the number of houses in the last 20 years has grown by over 30%. Same with the Village I am living in now in South Devon.

Data please bulls!

Edited May 2, 2010 by Confounded

[Georgia O'Keeffe]

...and credit can come from all sorts of sources and from all over the world.

it can only healthily come as a result of real economic growth via banks, central or private, without that it can only contract, the private banks are now bust and have passed liability to the state, it is now just a case of waiting for the state to go bust.

Edited May 1, 2010 by Tamara De Lempicka

[winkie]

This thread is supposed to be data driven, a very poor show so far from the bulls rolling out the normal Bullsh!t

Point 1, show me these areas which have massive oversupply in the wrong areas which has resulted in cheap housing? Supply and natural demand (not speculative credit bubble driven) should have resulted in very cheap housing relative to the national average? Or even a houses priced at normal historical averge i.e an average of 84K (3.5x 22k +10% deposit). Manchester an area accused of oversupply of the wrong types of property, a 1 bedroom flat is still costs £120k and I would not describe that as an average house!

Point 2 please produce data? My point in the original post was that we have not had this mythical population explosion.The myth of shortage of anything increases demand due to the normal hoarding and greed this encourages. This is why every week the BBC runs a piece on the chronic shortage yet provides no evidence of it in an attempt to support prices.

People are constantly told by the propaganda merchants that we have a shortage yet there never provide evidence. I have provided evidence that we have more then met the need of ever new person in the UK even if they all ended up in single person households!

I have lived in property hotspots all round the country over the last few decades (Cambridgeshire, Bristol, Warwickshire, South Devon) all of which seem to have built a huge quantity of all sorts of houses. In the village that I grew up in the number of houses in the last 20 years has grown by over 30%. Same with the Village I am living in now in South Devon.

Data please bulls!

All yon need to do is contact the local councils and ask to see the housing waiting lists.

I am not saying that there are heaps of privately owned empty property....I know of people that have bought property as a store of value and have no intention of living in it or renting it out...IMO people like that should pay for that luxury.

[Darkman]

This thread is supposed to be data driven, a very poor show so far from the bulls rolling out the normal Bullsh!t

It doesn't have to be an exclusively bull argument. If more housing is built, how does it hurt you? Even if there is no shortage, an oversupply can only help in bringing prices right down.

Why is his such a difficult concept for some to grasp? Maybe there's a closet NIMBY club hiding here.....

[Pent Up]

It doesn't have to be an exclusively bull argument. If more housing is built, how does it hurt you? Even if there is no shortage, an oversupply can only help in bringing prices right down.

Why is his such a difficult concept for some to grasp? Maybe there's a closet NIMBY club hiding here.....

I think the point of the thread is that a major argument for high UK prices is that there is massive shortage of supply and the data above shows this to be false.

Anyone with half a brain can plainly see high house prices are caused by a reckless lending and fraudulent borrowing.

[Brave New World]

This thread is supposed to be data driven, a very poor show so far from the bulls rolling out the normal Bullsh!t

Point 1, show me these areas which have massive oversupply in the wrong areas which has resulted in cheap housing? Supply and natural demand (not speculative credit bubble driven) should have resulted in very cheap housing relative to the national average? Or even a houses priced at normal historical averge i.e an average of 84K (3.5x 22k +10% deposit). Manchester an area accused of oversupply of the wrong types of property, a 1 bedroom flat is still costs £120k and I would not describe that as an average house!

Point 2 please produce data? My point in the original post was that we have not had this mythical population explosion.The myth of shortage of anything increases demand due to the normal hoarding and greed this encourages. This is why every week the BBC runs a piece on the chronic shortage yet provides no evidence of it in an attempt to support prices.

People are constantly told by the propaganda merchants that we have a shortage yet there never provide evidence. I have provided evidence that we have more than met the need of ever new person in the UK even if they all ended up in single person households!

I have lived in property hotspots all round the country over the last few decades (Cambridgeshire, Bristol, Warwickshire, South Devon) all of which seem to have built a huge quantity of all sorts of houses. In the village that I grew up in the number of houses in the last 20 years has grown by over 30%. Same with the Village I am living in now in South Devon.

Data please bulls!

Very true.

Anecdotally on my street of 20 or so victorian terraces in a nice part of a highly desirable town there are 3 empty properties. Yes there is more demand in these areas but that is not to say there are not people living on the streets!!!

The additional demand in this country is coming from transient migrants who, due to their wages, live in flats/bedsits etc. And even Clegg understands their is a massvie surplus on these types of properties.

The shortage waffle is just a smoke screen for the real issue which is an affordability shortage.

[Flat Bear]

Based on a post by Tired of Waiting I have done a bit of research to help expose the overcrowding/shortage of properties myth.

• Over 40 years has growUK population n by 5 Million according to World Bank data.

• This is the equivalent of a125,000 net increase per year

• In 2007 we built 167,577 new homes, more than 1.3 homes for every new arrival!

The new homes figure above does not include the huge number barn conversions etc which have happened up and down the country.

So even if every new person in the UK population chooses to live on their own we are building enough houses for them. Looks to me that we may actually have an over supply. All the people buying into the propaganda designed to prop up the housing market may be a bit miffed when the dust settles.

[*] Over 40 years has growUK population n by 5 Million according to World Bank data.

The growth rate was much higher. Approx 6.5million over the period and the rate is increasing.

The fact is there is an acute shortage of (suitable) homes in England for the current expanding population and either more houses need to be built or the population needs to shrink to alleviate this problem. But ratio of homes to people is only one factor and all other infastructural requirements must always be considered.

This ratio, although not being of prime importance, is a factor that can not be ignored in house price movement.

[Confounded]

All yon need to do is contact the local councils and ask to see the housing waiting lists.

I am not saying that there are heaps of privately owned empty property....I know of people that have bought property as a store of value and have no intention of living in it or renting it out...IMO people like that should pay for that luxury.

Winkie you disappoint me, or are you throwing them up for me to smash down? Either way if this was QI you would be getting the warning siren sound the the myth alert.

In order for the BBC to run a piece about the UK shortage of housing they got a bit creative and went to Ireland to show they have such an oversupply that they are contemplating knocking them down, but that is not the case with us and our dire shortage. More here

People waiting for affordable housing is not a sign that we have a shortage but a sign housing is increasingly becoming too expensive for the average citizen. In the Republic of Ireland were they have such a massive oversupply (I am not claiming the UK has this level of oversupply but I could be proven wrong once the dust settles on the credit bubble) they have a record number of people waiting for affordable housing

Irish shortage of affordable housing

As a proportion of their population they have a greater need for affordable housing then the UK!

"Ireland has a record number of people on its public housing waiting lists. Recent figures show 48,000 households on public housing waiting lists, which represents approximately 140,000 people in need of housing[ii] To cater for current needs an output of 10,000 units per annum is required but despite Government commitments not enough social housing is being developed[iii]."

Couple this with the UK government support the rental market to the tune of £20 billion pushing rents up is there any wonder people are in need of cheaper housing?

Bulls data please!

[Confounded]

[*] Over 40 years has growUK population n by 5 Million according to World Bank data.

The growth rate was much higher. Approx 6.5million over the period and the rate is increasing.

The fact is there is an acute shortage of (suitable) homes in England for the current expanding population and either more houses need to be built or the population needs to shrink to alleviate this problem. But ratio of homes to people is only one factor and all other infastructural requirements must always be considered.

This ratio, although not being of prime importance, is a factor that can not be ignored in house price movement.

Data please?

[AteMoose]

...there are two issues here...1. there are plenty of homes people don't want in the wrong places. 2. there is a dire shortage and overcrowding in places where people want to live...supply and demand sets the price, always has done always will.

No, for example people want to live in london BUT the population of London went down this century, London is still smaller than it was in the 1930s. Agree with OP I did the same calc 3 years back using ONS data according to my calcs population had grown by 10% but housing stock has gone up by 30% over the past 40 years. The result is 50 years ago the average people living in a property together was 3ish, today it is more like 1.5....

London Population:

1921 — 7,386,848

1931 — 8,110,480

1939 — 8,615,245

1951 — 8,196,978

1961 — 7,992,616

1971 — 7,452,520

1981 — 6,805,000

1991 — 6,829,300

2001 — 7,322,400

2006 — 7,657,300

Edited May 1, 2010 by AteMoose

[TGP]

OK,

One major factor not included in your graph is the number of people per household. If the number of people are the same, the number of houses are the same, but the number of people per household halves.... then your graph would say "no shortage of housing" wheras 1/2 the pop. of the uk would be unable to find housing.

This needs to be taken account of (clearly).... The Census information on this is in the 1969-2009 period the number of people per houshold fell from 3.1 people to 2.4 a drop of about 22%.

Seeing as your original graph seemed to show that the people/house ratio was at about parity... that would indicate that we had a housing shortage of approx. 23% or roughly 5-6m houses.

Data available at ........ http://www.statistics.gov.uk/cci/nugget.asp?id=2325

So, that by itself defeats the object of the graph. It includes most of the scenarios "bulls" above (using your parlance) covererd...... older people living alone, families splitting more, more young people living alone etc etc.

There is also another factor that should be taken into account (as the above figure doesn't). The rise of the 2nd home. So.... not only is the average household smaller (2.4 as opposed to 3.1) I suspect on average those households have more houses via 2nd homes. Say, the average was 1.01 per aadult (one in a hundred owned a second home). Right now it's 1.08 (eight percent of uk adults own a second home ... http://direktline.com/home/secondhomereport.pdf ).

I can't find figures for the late 60's/early 70's on this but I suspect it was nowhere NEAR that high back then. Thats another (from the same link, and assuming a much lower rate in the 60's) 2% of the housing off the market or roughly another 1/2m houses we'd be short over and above your graph.

So..... Assuming (and this is a big if, because you only included house build figures for last year) that the average was 167k houses built and 125k immigrants. And that the immigrants now conform to the 2.4 per household model.

That would put us approx. 1.5-2.5m homes short once these figures are taken into account.

Finally, where is the adjustment in your figures for houses knocked down ? Not every house built exists forever. You need to deduct houses demolished as well (counting builds without counting demolished houses is only ever going to get you ludicrous figures). This article doesn't have great figures... http://www.informaworld.com/smpp/section~content=a779030439~db=all~start=779030551~fulltext=713240929~dontcount=true (it's talking largely about something else).... but it does say demolisions are 15k a year now, were 20k a year in the 90's and were 80k a year in the 70's..... so assuming an average over 40 years of about 50k a year (a reasonable estimate from those figures) thats ANOTHER 2m houses you graph does not cover.

Now..... I'm not bullish on the housing market.... Personally, I am predicting something like a 20% decline over the next 2-3 years..... but I DO like using good stats.

Based on improving your stats by

Dividing the number of immigrants by 2.4 as they fit into todays average occupancy.

Adjusting for the change from 3.1 to 2.4 individuals per house.

Adjusting for the change that is approx. 2% of housing stock being taken up by second homes.

Removing the houses demolished as well as counting the houses built.

Your stats would show that the UK is currently about 3m (min) to 5.5m (max) houses short of the "person who wants a house/houses in existence) ratio of the 1970's. Or, roughly, about 20% of the entire uk housing stock short.

You asked for other data. You got it. Hope you're happy.

Yours,

TGP

[AteMoose]

OK,

One major factor not included in your graph is the number of people per household. If the number of people are the same, the number of houses are the same, but the number of people per household halves.... then your graph would say "no shortage of housing" wheras 1/2 the pop. of the uk would be unable to find housing.

This needs to be taken account of (clearly).... The Census information on this is in the 1969-2009 period the number of people per houshold fell from 3.1 people to 2.4 a drop of about 22%.

Seeing as your original graph seemed to show that the people/house ratio was at about parity... that would indicate that we had a housing shortage of approx. 23% or roughly 5-6m houses.

Data available at ........ http://www.statistic...get.asp?id=2325

So, that by itself defeats the object of the graph. It includes most of the scenarios "bulls" above (using your parlance) covererd...... older people living alone, families splitting more, more young people living alone etc etc.

There is also another factor that should be taken into account (as the above figure doesn't). The rise of the 2nd home. So.... not only is the average household smaller (2.4 as opposed to 3.1) I suspect on average those households have more houses via 2nd homes. Say, the average was 1.01 per aadult (one in a hundred owned a second home). Right now it's 1.08 (eight percent of uk adults own a second home ... http://direktline.co...dhomereport.pdf ).

I can't find figures for the late 60's/early 70's on this but I suspect it was nowhere NEAR that high back then. Thats another (from the same link, and assuming a much lower rate in the 60's) 2% of the housing off the market or roughly another 1/2m houses we'd be short over and above your graph.

So..... Assuming (and this is a big if, because you only included house build figures for last year) that the average was 167k houses built and 125k immigrants. And that the immigrants now conform to the 2.4 per household model.

That would put us approx. 1.5-2.5m homes short once these figures are taken into account.

Finally, where is the adjustment in your figures for houses knocked down ? Not every house built exists forever. You need to deduct houses demolished as well (counting builds without counting demolished houses is only ever going to get you ludicrous figures). This article doesn't have great figures... http://www.informawo...~dontcount=true (it's talking largely about something else).... but it does say demolisions are 15k a year now, were 20k a year in the 90's and were 80k a year in the 70's..... so assuming an average over 40 years of about 50k a year (a reasonable estimate from those figures) thats ANOTHER 2m houses you graph does not cover.

Now..... I'm not bullish on the housing market.... Personally, I am predicting something like a 20% decline over the next 2-3 years..... but I DO like using good stats.

Based on improving your stats by

Dividing the number of immigrants by 2.4 as they fit into todays average occupancy.

Adjusting for the change from 3.1 to 2.4 individuals per house.

Adjusting for the change that is approx. 2% of housing stock being taken up by second homes.

Removing the houses demolished as well as counting the houses built.

Your stats would show that the UK is currently about 3m (min) to 5.5m (max) houses short of the "person who wants a house/houses in existence) ratio of the 1970's. Or, roughly, about 20% of the entire uk housing stock short.

You asked for other data. You got it. Hope you're happy.

Yours,

TGP

IMHO no if there was a shortage families would live together and the average people per property would rise. There is a concerted effort to break up families and promote everyone living in a separate property (look a the housing policy). Why? Well if everyone lives in a separate property more tax can taken and gov can be bigger. If there was a real housing shortage there would be a huge number of people on the streets and you would have multiple families sharing one house... There is more than enough property in the UK, just not enough to live in one each... The solution isnt to build more, but to better use existing properties

Edited May 1, 2010 by AteMoose

[Stars]

...supply and demand sets the price, always has done always will.

But not, as is implied by many, the supply of houses. The important supply in the housing market is not the supply of houses, but the supply of locations and locations are in absolutely fixed supply. This is why the housing market and real estate in general does not work at all like a typical market in produced items like (say) a cars or shoes.