The municipalities have been lagging behind their own construction targets for more than six years, as the UK continues to struggle with the housing crisis, research has revealed.
According to City Council figures, Project Etopia, a modular house builder, noted that developments across the UK are evolving so rapidly that 316 locations will fall short of their targets by 889,803 homes over the next eight years.
A government report by Sir Oliver Letwin came to the conclusion that the builders intentionally build slowly so as not to lower the high house prices.
Housing in 316 municipalities will expire over the next ten years by 889,803 homes
Last September, the Ministry of Housing, Local and Local Government, together with local authorities, set annual housing targets, which in July of that year informed the government's new national planning strategies.
Just one year after the report was published, 241 of the 316 sites are already in deficit, 9.2 years behind on average.
And of the ten councils that are furthest behind, Project Etopia estimates that it would take until 2060 to build all the houses needed by 2026.
Which councils are the worst performers?
The numbers show that Southend-on-Sea is by far the worst city outside of London to reach the set goals. By the end of 2026 there will be 8,440 houses missing.
If it does not get faster, it will take another 34 years before enough housing is available.
Will the government's goal of achieving 300,000 homes per year by 2020?
The short answer is probably not – goals are far from being achieved, no matter how you measure them.
In fiscal 2016/17, 217,350 newly built homes were completed, far from the government's target of 300,000 homes per year by 2020.
NHBC figures show that 106,031 newbuildings were completed by NHBC members this year, accounting for around 80 percent of the market.
Considering an additional 20 percent, the total number for this calendar year would amount to around 132,500 without the conversion of non-residential real estate.
The government's fiscal year runs from April to March, and although it is too early to say how much later, it is safe to say that the 300,000 target is not reached.
Steve Wood, chief executive of NHBC, said, "300,000 are obviously far away and a challenging target.
"There is no silver bullet, but the way the industry works has to change."
Councilor James Courtenay, Deputy Chairman of the Southend-on-Sea Council, said: "In July of this year, the revised framework of the government's national planning policy examined the housing needs of our region with a new formula.
"We are in the process of preparing new plans to see how and how much of that need can be sustained in Southend.
"With the release of the new NPPF only three months away, it's premature to make meaningful predictions about what's coming through our new local plan or not."
Although the revised NPPF did not enter into force until July, it was informed by the report published in September last year, which details the number of new homes the country has to build in each city and city.
Joseph Daniels, chief executive of Project Etopia, said, "Our research shows that councils have a lot to do if they are to achieve these goals."
York and Luton are the only cities dating back more than 20 years. All ten councils with the biggest deficits are on average two decades behind the pace.
The Project Etopia study found that even councils with fewer houses, such as Gosport in Hampshire, which only needs to build 238 a year, had difficulty achieving their own goals. Gosport is 17 years behind.
Why are the councils so far behind?
For years, councils have no longer been able to build new residential buildings themselves, so they are available to developers whose building rates can be affected by economic and planning constraints.
However, at the beginning of the year, the Prime Minister announced at the Conservative Party conference that the borrowing limit should be lifted in order to encourage local authorities to commission and finance new developments themselves.
Daniels said, "It's alarming to see so many areas so far behind. If the tempo does not rise quickly, we are in an even deeper black hole than we are now in 10 years.
"Housing needs are obvious to everyone, but not enough is done. There is complacency – everyone knows that we need to build more houses, and fast, but not enough resolute action is taken to alleviate the crisis. "
So far, 2018 NHBC completions were registered, representing 80% of the market
Why does the construction of houses take so long?
On the same day as last month's budget, Sir Oliver Letwin's years-long review of the rate at which new homes are being built was published in its final form.
Letwin did not find that the big housebuilders stay ashore until their maximum value can be realized. This practice is referred to as "landbanking" and is often criticized.
|advice||Target 2016 – 2026||Annual construction rate||2026 defecit||How many years behind?|
|Source: Project Etopia|
Instead, he found that contractors buy land based on existing local real estate values and build at a rate that will not flood the market – essentially slow enough to keep house prices where they already are.
The test looked at the time the developers took from planning approval to completion of the final home in 15 major locations in high-demand areas, averaging 15.5 years.
The review also found that only 6.5 percent of the total planned homes were built each year.
Letwin's report states, "Once a home builder working on a large property has paid a price for the land based on the assumption that the sales value of the new homes will be close to the current value of used homes in the area The home builder is not inclined to build more dwellings of a particular type at this location than can be sold by the firm at that location in a given year. "
In layman terms, this means building slowly that house prices will not fall.
Letwin concluded, "It would not make sense to try to solve the problem of market absorption rates by forcing major builders to lower the prices at which they sell their current products.
"In my opinion, this would create very serious problems not only for the big builders, but possibly also for the prices and financing in the housing market and thus for the whole economy."
Housing types built in Great Britain since 1946 – Office of National Statistics
Instead, he noted that the requirement for home builders to build a mix of homes, including a high proportion of affordable housing, would keep current house prices and still speed up the construction of homes.
Letwin has not made any suggestions on how to fix buyers' affordability thresholds, as the report focuses solely on bringing more homes to market faster.
Instead, he suggested creating incentives for developers to build more affordable housing, and to give installments additional powers to buy land cheaper for development.
To put the size of housing shortage in the UK in perspective, France has built about twice as many new homes each year since 1970 as Britain and half the price of house prices.
Studies by the National Statistics Office show that the average annual earnings between 1997 and 2016 rose only 68 percent, while house prices rose by 259 percent.
Thirty years ago, according to ONS estimates, full-time employees in England and Wales could normally spend 3.6 times their annual income on buying a home.
Today, homebuyers can count on 9.7 times the annual income to buy a newly built property and 7.6 times their annual income on an existing property.
Source: Open Property Group
Research by Open Property Group suggests that house prices must decrease by an average of 36 percent to £ 125,329 to make home ownership affordable to individuals earning average wages.
Open Property Group CEO Jason Harris-Cohen said, "Home ownership peaked in the UK in 2007. These figures show how far the Passive Right of the baby boomer generation is unattainable for millennials.
"With a better supply of available real estate, prices could naturally become cheaper as developers and home sellers seek to make their homes more salable."