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Homes in England are more cramped than those in New York City, according to new analysis that showed UK property offers the worst value for money in the developed world.
The Resolution Foundation found that the UK has the oldest properties in Europe and English homes have less floorspace than many international peers, notably Germany, France and Japan. With 38 square meters on average per person, London homes are even more cramped than those in New York City.
The findings, which also show UK housing costs are also more expensive relative to general prices than in any OECD country, underscore the scale of the housing crisis in Britain. Many younger Britons are struggling to get a foot on the property ladder due to soaring prices, and the issue is rising up the political agenda ahead of an election expected later this year.
“By looking at housing costs, floorspace and wider issues of quality, we find that the UK’s expensive, cramped and aging housing stock offers the worst value for money of any advanced economy,” said Adam Corlett, principal economist at the Resolution Foundation. “Britain’s housing crisis is decades in the making, with successive governments failing to build enough new homes and modernize our existing stock. That now has to change.”
The Resolution Foundation found that if all UK households were “exposed to the full brunt of the housing market, the UK would devote the highest share of overall spending to housing” to every OECD country except Finland.
Some 38% of UK homes were built before 1946, higher than the level of 29% in France, 24% in Germany, 21% in Italy and 11% in Spain. That means British properties by comparison are poorly insulated and come with higher energy bills.
The cost of UK housing and rentals has been sent surging by the lack of supply along with an upswing in demand, particularly in the post-pandemic period. While higher interest rates cooled the surge in house prices, rents in the UK and London are rocketing at the fastest pace on record.
The UK has struggled to build enough homes to meet the demand with just 234,400 new homes added in 2022/23. That’s despite the Conservatives presenting a target to build 300,000 homes a year by the mid-2020s in its 2019 manifesto.
Estimates by Capital Economics show that this now should be closer to 385,000 to bring real house price growth in line with the European average.
