John Wriglesworth on the gap between desire and supply in the homes market

What does the homebuyer want? It is a question that private housebuilders have become well versed in responding to. Their semi-detached and detached house types have been the aspiration of generations of homebuyers, and consequently housebuilders have been happy to build them. But the status quo has been disturbed by a number of factors, and there is now a clear disparity between the type of properties that homebuyers want and housebuilders’ stock.

One key consideration is that what homebuyers want and what they can realistically afford in terms of overall cost and mortgage repayments are two very different things. Yes, of course most of us would love to live in detached six-bedroom homes, but our building society manager may have other ideas. Although house prices have levelled out this year, inflation over the past 10 years has been at a substantial enough rate to have doubled the value of properties in many parts of the UK.

Where buyers could have afforded a three-bedroom house five years ago, their budgets will now only stretch to one- and two-bedroom terraced homes or apartments.

This is particularly evident in the first-time-buyer sector where many are struggling to get on to the property ladder in any way and others are having to compromise in terms of the size, location and quality of their first home.

Some blame lies with availability rather than affordability

However, this gives only a partial explanation of the picture. The remainder of the blame has to lie with the availability, rather than the affordability, of housing stock. At present, more apartments than houses are being built. Data from, which covers more than 80% of the new homes market, shows that last month 56% of the properties for sale on its website were apartments. This is up a massive 36% from two years ago. The growth in apartments has been achieved largely at the expense of detached homes, which now make up just 30% of new homes for sale, compared with 45% two years ago.

This situation is not, as some might say, because of a failure of housebuilders to meet the needs of their customers – far from it. Housebuilders are being prevented from building thousands of bigger houses with large gardens and several parking spaces because their hands are tied by the constraints of government at both a central and regional level. They are effectively being forced to build block after block of two-bed flats to meet the government’s aspirations on density.

Kate Barker was correct in her March 2004 report to highlight the gap between supply and demand as a key problem. However, she was wrong to place so much of the responsibility for correcting this on to the shoulders of housebuilders. Major overhauls are needed to planning regulations to allow more flexibility with regards to housing density, size, and local development plan restrictions. Only when the government takes steps to translate recommendations into policy and practice will the housebuilding industry be able to translate this into action, and begin to address the issues of supply and demand.