UK’s housing stock offering ‘worst value for money’, think tank warns

The UK’s housing stock is offering the “worst value for money” of any advanced economy, new analysis by the Resolution Foundation has warned.

This was based on a comparison of housing costs, floorspace, quality and wider price levels across other countries, with the think tank also warning that households in the UK are “paying more for less”.

The Foundation’s latest Housing Outlook used OCED data to compare various housing metrics across advanced economies to assess the scale and uniqueness of the UK’s housing crisis compared to other similar economies, many of whom are also frequently reporting their own housing problems.

To make an international comparison of the actual market cost of housing, the analysis examined what it would cost to rent all homes – incorporating the imputed rents, or what owners would pay if they rented their home at market rates – to show how the market price of housing varies across a range of countries.

This approach found that housing represents a greater share of consumption on this basis in the UK than in any other advanced economy, bar Finland.

In theory, these high housing costs could reflect the cost of a superior quantity or quality of housing in the UK, but the Foundation suggested they do not. The report showed that English homes have less average floorspace per person (38 m2) than many similar countries, including the US (66 m2), Germany (46 m2), France (43 m2) and Japan (40 m2).

Overall, Brits get 24% less housing per person than Austrians and 22% less than Canadians, both of whom have similar consumption levels overall.

The UK’s housing stock is also the oldest of any of European country, with a greater share of homes built before 1946 than anywhere else (38%). By contrast, just 21% of homes in Italy, and 11% in Spain, were built before the end of the war. Older homes tend to be poorly insulated, leading to higher energy bills and a higher risk of damp.

“Britain is one of many countries apparently in the midst of a housing crisis, and it can be difficult to separate rhetoric from reality,” commented principal economist at the Resolution Foundation, Adam Corlett.

“But by looking at housing costs, floorspace and wider issues of quality, we find that the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy.

The Foundation has concluded that high cost and low quantity has left the UK’s housing stock offering the “worst value for money” of any advanced economy.

UK households pay 57% more for the same housing as their counterparts in Austria, for example, and 36% more than those in Canada. The research showed that housing in New Zealand offers the second worst value for money, followed by Australia and Ireland – all countries also gripped by housing crises.

Corlett added: “Britain’s housing crisis is decades in the making, with successive Governments failing to build enough new homes and modernise our existing stock. That now has to change.”

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