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UK households grow in number but shrink in size: There's only 2.3 people in each home compared to 3 in 1970


05-08-2015

 


• Today, average of 2.3 people live in each property compared to 3 in 1970
• 41% of constructions last year were for one or two-bedroom homes
• Housebuilders say constructing 180k homes a year or more 'unachievable'

By Lee Boyce for Thisismoney.co.uk 
 

The average number of people living in each British household has dropped to 2.3 this year, compared to nearly 3 per property in 1970, as fewer people share each home.

At the same time, the total number of households in Britain is projected to reach 27.5million this year with the figure expected to grow to 31.2million by 2030, according to work from the Centre for Economics and Business Research and Legal & General.

But despite the falling number of people living together, only 41 per cent of all new housing constructions last year were for one or two-bedroom properties, down from 51 per cent in 1992.


Shrinking households: The number of people living in each household has fallen since the 1970s, data shows

The trend of fewer people living together is expected slow from here, hitting an average 2.25 people per home by 2030.

Changes in the way we live our lives are contributing to the shrinking size of households. Higher rates of divorce means large families are split into smaller groups that live separately, while increased life expectancy means elderly people spend longer living alone after the death of a partner.

The increased number of smaller households is also being reflected in the UK's housing stock. 

High property prices have encouraged owners of large properties to split them into smaller ones. For instance, a Victorian five-bedroom house could be split into three separate households for rental purposes. This is a trend seen in particular in in high-demand areas such as London.


Mark Holweger of Legal & General Assurance Society, said: 'The classic "two-point-four-children" family unit has become '2.4 people' in today's Britain.

'We are seeing smaller households inhabiting ever-smaller properties – which in turn is creating higher numbers of overall households.'

Across Britain, the past decade has seen a decline in the percentage of households living as owner-occupiers, while the proportion of households residing in rented accommodation – and particularly private rented – has risen.

In 2015, England is estimated to have the largest private rented sector, accounting for 21 per cent of households. This compares to 20 per cent across Britain and a low of 16 per cent in Wales.

Based on current trends in housing construction tenures, shifting perspectives on rent and the prospect of rising mortgage costs ahead, Legal & General says these shares look set to grow further, with private renting expected to account for 30 per cent or more of all households in each UK nation by 2030.

Housebuilding and ownership has been a hot topic in the run-up to the General Election tomorrow.

In 2012-13, the UK hit a post-war low of 135,500 homes built - but demand is growing, especially helped by the Help to Buy scheme. Britain's shortfall of new homes depends on who you believe.

 

The general figure cited is that we need about 230,000 new homes a year – some will have you believe it is far more, others suggest it is less.

The recent Lyons Housing Review for the Labour Party claimed that we need to build 243,000 new homes a year – far more than are being constructed at present.

It comes as more than two thirds of UK housebuilders believe delivering more than 180,000 new homes a year is unachievable under current market conditions, according to upmarket estate agent Knight Frank's latest housebuilding report.

The report revealed 67 per cent of housebuilders said the maximum sustainable annual delivery of new homes was 180,000 or fewer.

Just nine per cent said it was possible to build more than 200,000 residential units a year.

The survey also quizzed housebuilders on what measures policymakers should take to increase long-term housing delivery in the UK.

Moving to bump up resources in local planning departments was considered the most important step, with 82 per cent citing this.

Improvements to skills and training in the industry and opening up access to public land were also top of the suggestion list.

Justin Gaze, of Knight Frank, said: 'The capacity to deliver the sheer number of new homes required is the fundamental issue faced by the UK's housebuilders.

'The inability to create the necessary number of new homes is being driven primarily by a skills shortage in the development sector which shrunk dramatically following the financial crisis, limited development funding and the lengthy mortgage approval process which is delaying purchasers.'

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