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How tackling housing can help 'level-up' the UK

As our research reveals a public call for affordable, quality housing to top the government's levelling up agenda, we look at how the housing system can work more effectively to respond to that call.

In response to the widening of socio economic divisions during the pandemic, the Government has reaffirmed its commitment to levelling up. While much of the focus of levelling up has been on road, rail and regeneration, our research shows that the public’s top priority has largely been overlooked. Our survey, Rethinking levelling up, found that 70% of the public say that a focus on housing would be the most effective way to level up the country and reduce inequality, and they rate quality almost as highly as affordability.

In the last year the COVID-19 pandemic has forced people to lead their lives much closer to home. For some, it has been a welcome opportunity to spend more time in their homes and communities, but for those with small, substandard homes, it has brought to the fore long standing issues of affordability, quality and equality.

Tackling the country’s housing shortage has long been a priority for successive UK governments. The current government has had some success in working towards its aspiration for one million homes to be built in the lifetime of this parliament, and continues to progress towards its target of 300,000 homes a year by the mid-2020s. However, this is short of the target and prioritises both quantity over quality, and national targets over local needs.

Public priorites for levelling up: More affordable housing (UK av = 55%),  Better quality housing (UK av = 39%)

Beyond investment

Though investment of successive governments - both in policy and financial terms - has had positive impacts on the housing system, a significant gap remains between the investment and effort going into the system and the outcomes for the public.

Of course increased funding for building new homes would help, but this is not just a funding issue. To deliver the best outcomes, there is a need to look beyond individual policies and funding programmes, and connect and align the disparate parts of the sector working across real assets: public, private and not-for-profit.

Four levers to deliver the UK's housing needs

We believe there are four levers which together could deliver the housing the UK needs and contribute to levelling up the UK.

While each of these levers requires central government to intervene, they are just as reliant on the leadership of other sectors to mobilise at a local level and suggest the need for greater strategic housing planning at a regional or place level.

Understanding the need

For national, regional and local policy makers it is imperative that data is shared and understood at a local level as well as across political and organisational boundaries in order to shape the type, timing and nature of housing interventions. Too often, decisions on housing are based on top-down statistical targets and made without a deep understanding of the needs of a place and its people, and without a clearly defined outcome in mind.

The current approach relies on the public, not-for-profit and private sectors sharing information to understand local housing needs and ambition, before aligning their decision-making. There needs to be a consistent and robust process in place for this to approach to have widespread success. This process should be based on data, with built in democratisation that defines broad housing needs - such as quality, open and green spaces - as well as the mix of housing to be built.

Investing in skills

Alongside investing in new and existing homes, investing in capabilities in regional and local government and directly in communities could transform places and opportunities for residents. In the planning white paper, the Government recognised the role of local authorities in place-making and design alongside its role in identifying housing needs.

It's the right time to focus on how to build these capabilities. Similarly, regional and local government need to work with their private sector partners to understand what new skills and resources they might need to complement the role of government. Building the right capabilities will create valuable assets for the local community's future.

The Government Digital Service (GDS) offers a model in how central government can play a leading role here in fostering technical capability across government; GDS’s success was based on introducing new skills into government, and empowering other departments and organisations to deliver things such as digital transformations. An initiative focused on place-making could deliver similar results for local areas.

Strategic planning

We see a key strategic housing role for regional government - combined authorities, groupings of unitary authorities, and metro mayors - to look at housing needs as a whole and as part of regional economic development plans. They have the potential levers to harness and integrate the system so that housing decisions are better aligned to outcomes, communities and places rather than narrow boundaries.

Local government - accountable for making local places work - is best placed to lead, galvanise and mobilise those who have a role in delivering housing and their associated services - from developers, to housing associations, communities and other enabling organisations such as healthcare and transport.

But strategic planning would be better considered at a sub-regional level. Creating clarity on the roles, responsibilities, accountabilities and resources at a regional and local level will help both to deliver better local outcomes and be sensitive to regional equality.

New entrants

The last time house building in England topped 300,000 homes a year was in 1969/70, and some 44% of these were built by local authorities. To meet this target, and deliver the quality homes people want, local authorities will have to play a bigger role, but they can’t do it alone. The housing market is influenced by a host of actors and factors, with no single body capable of resolving the multifaceted issues - from homelessness to housing affordability, quality and growth. New entrants are needed, both in terms of investment, house building and broader place-making capabilities.

The Government has a key enabling role to play in opening up these opportunities, particularly in the areas that are the focus of ‘levelling up’ efforts where there isn’t sufficient demand for greater housing density to fund wider regeneration efforts. In some places, the role of government - national and local - will be investing and delivering, while in others, their role will be as an enabler and convenor, bringing together other players so that places can generate their own success.

What does this mean for the government?

If the government is to tackle housing as part of its levelling up agenda, it needs to look beyond house building targets and take a localised approach. The public values not just the availability of housing but its quality and affordability - as well as the creation of vibrant and sustainable neighbourhoods and communities. The role of government will be different in different places, but the focus everywhere needs to be on understanding local needs, ensuring decisions are made at the right level, and investing in skills, capabilities and capacity to ensure that people across the country get the homes they need.

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