House building in the North

Apr 15, 2016

The new ‘Northern Powerhouse’ encompasses Manchester, Liverpool, Leeds, Sheffield, and Hull city regions, as well as the North East. Together, these city regions – mostly combined authorities – have a population of over 10 million, bigger than London’s 8.6 million.

During the last 35 years, the ‘Northern Powerhouse’ areas have built on average 25,000 homes a year, which is significantly higher than London’s  17,000 homes a year (England 150,000 a year). The ‘Northern Powerhouse’ areas as a whole have broadly pulled their weight in contributing to the nation’s house building, measured on a per capita basis.

However, whereas the ‘Northern Powerhouse’ built 290,000 homes during the 1980s it built only 210,000 homes during the last decade to date, or 28% fewer. This broadly reflects the decline in housebuilding nationally (26% fewer). London by contrast built 150,000 homes during the 1980s and 200,000 during the decade to date, or 28% more. So in national share terms the Northern Powerhouse areas have broadly flat-lined and London has doubled. Indeed London is now building as many homes as the Northern Powerhouse areas.

London’s population was of course in decline until the late 1980s – so it is little surprise that so few homes were built in London during the 1980s. However, London’s population has grown rapidly since then and the struggle of housebuilding to keep pace and London’s rocketing house prices as a consequence is well documented. In 2004-2013 alone, London’s population grew more than twice as fast as the Northern Powerhouse areas.

Population (and population change) is a key driver of the demand for new housing in any area or locality. This in turn is driven partly by economic performance or, simply put, jobs.  So the contrasting trends in house building of the Northern Powerhouse and London is likely to be a reflection  of their contrasting performance and fortunes economically. In other words, house building is a barometer of economic success – London has done well and the Northern Powerhouse has done okay at best.

For the Government to make the Northern Powerhouse a success it will have to take a holistic policy approach which goes far beyond just housing. That is also about leadership and governance (yes, devolution), to achieve the overall rebalancing the UK economy both geographically and sectorally. Clearly there would be little use in ramping up house building in the Northern Powerhouse without both people and jobs – in the economic language, supply cannot create its own demand.

Within the Northern Powerhouse there is a mixed picture of housebuilding over the last 35 years. Of the Northern Powerhouse six city region areas, Leeds (the 2nd biggest in population terms) has performed the strongest in terms of house building during the latest decade – building nearly as many homes as it did in the 1980s and outperforming the national average. Within the Leeds city region, the district of Leeds itself has performed similarly, but Calderdale district has excelled with a 51% increase in the number of homes built. Indeed, Calderdale is the only district in the Northern Powerhouse that has outperformed London as a whole ( – though Manchester district nearly matches London).

Manchester city region ( – the most populous) and The North East city region and are the next strongest house builders, each with a 26%  fall in the number of homes built in the latest decade compared to the 1980s, again in line with the overall Northern Powerhouse and national picture. Within these Manchester and Durham districts are the shining lights with more homes built in the last 10 years than in the 1980s. Stockport and North Tyneside have seen the steepest falls.

Next, and very closely behind, is Sheffield city region, which has seen a slightly steeper fall in house building (of 29%), with Sheffield district itself seeing the worst fall of 43%. Yet, Sheffield city region contains one of the strongest performing districts of the entire Northern Powerhouse – Barnsley, where 9% more homes were built during the last decade than in the 1980s, illustrating how chequered the trends in house building are from one district – and city region – to the next.

But lagging far behind the rest, Liverpool city region and Hull and Humber city region have seen the steepest falls in house building in the Northern Powerhouse – down 41% and 48% respectively, though the latter figure is possibly distorted by the boundary changes that introduced the four new unitary authorities in the mid-1990s. Some of these areas also face some of the most deep-seated economic problems in England and will be the most challenging to turn around.

One of the greatest successes of the Thatcher Government in the 1980s was halting and then reversing Britain’s economic  decline. That decline was relative – yes the UK economy grew but just more slowly than the rest of developed world. Perhaps in years to come we’ll measure the Government’s success in creating a Northern Powerhouse in terms of how far we arrest the relative decline of the North compared to London.

Homes built TOP 5 districts 1980s, p.a. Last 10years,

p.a.

Change
Calderdale 334 505 +51%
Manchester 1,098 1,358 +24%
Wakefield 912 1,029 +13%
Barnsley 574 628 +9%
Tameside 479 513 +7%

 

Homes built CITY REGIONS VS LONDON 1980s,

p.a.

Last 10years, p.a. Change
LONDON 15,202 19,501 +28%
LEEDS 5,233 4,886 -7%
(ENGLAND) 180,233 133,377 -26%
NORTH EAST 5,966 4,396 -26%
MANCHESTER 7,092 5,219 -26%
NORTHERN POWERHOUSE 29,163 21,138 -28%
SHEFFIELD 3,721 2,652 -29%
LIVERPOOL 3,839 2,263 -41%
HULL&HUMBER 3,312 1,722 -48%

Source: DCLG live table 253 Housebuilding: permanent dwellings completed, by tenure & district

Author

Chris Walker

Chris Walker
Head of Housing, Planning and Urban Policy Read Full Bio

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