We need a retrofit revolution, not an open season for housebuilders
By Jack Portman —Thu 3 Oct 2024
“Building ever more new homes is fundamentally unsustainable given the resources, fuel, and land involved.”
As the new Labour government continues to lay out its plans for addressing the intertwining housing and climate crises, housebuilders are getting ready to ramp up construction in light of the party’s ambition to build 300,000 new homes per year over the next 5 years. In September, Homes England announced a long-term partnership with Lloyds Bank and Barratt Developments, the UK’s largest housebuilder, to deliver multiple large projects of up to 100,000 homes each, while the housebuilding giant Vistry has recently suggested that it could build up to 40,000 homes per year with the right support from government.
Pro-development think tanks have estimated that a “backlog” of around 4 million missing homes must be addressed in order to mitigate a perceived deficit in the UK housing market, meaning that more than 400,000 new homes would need to be built every year over the next quarter century in order to crawl out of a national housing shortfall. Labour have committed to building 1.5 million new homes by 2029, a pace of construction unprecedented in the last 50 years. To hit this delivery target would mean delivering 50% more new-build homes than the preceding government over the same timeframe, a major acceleration and intensification of housebuilding at a time when the quality and sustainability of new-build homes in Britain have been called into question.
The rationale for building massive numbers of new homes has been a talking point across the industry for some time now, with property consultants and lobbyists frequently releasing reports predicting an ever-larger demand for new-builds in the decades to come. Unsurprisingly, housebuilders have been advising government to prioritise hitting its ambitious national housebuilding targets over local concerns related to new development.
The number of new-build homes needed year-over-year seems to increase with every new publication inked by the property industry and its research affiliates. The problem is, if these new-build targets are to be met, the UK will fail to meet its net-zero targets in short order.
Recent findings produced by a team of researchers led by Dr. Sophus zu Ermgassen of the Durrell Institute of Conservation and Ecology at the University of Kent make it clear that creative alternatives to massive national house building targets need to be considered. The 2023 report indicates that building new homes under an ongoing “business as usual scenario” would eat up 104% of the entire UK carbon budget by 2050. According to the research team there is a pressing need to explore alternative options, including retrofitting the existing housing stock and devising more efficient ways of distributing and using dwellings and floorspace.
Another article published the following year by a team led by Dr. Michał P. Drewniok has indicated that just maintaining current levels of house building in the UK will deplete the entire carbon allocation for housing in the 2050 Carbon Budget by 2036. It is unambiguously clear: accelerating house building is in direct conflict with the urgent need to reduce carbon emissions.
These findings bring alarming clarity to a crucial and all too often overlooked dimension of the housing problem: building ever more new homes is fundamentally unsustainable given the resources, fuel, and land involved. House building accounts for a sizable amount of all greenhouse gas emissions: research from Historic Scotland reports that building a single two-bedroom cottage expends 80 tonnes of CO2, while refurbishing an existing dwelling produces just one tenth of that carbon output.
The ‘build, build, build’ paradigm of housing delivery largely relies on framing the UK’s housing crisis in a particular light. Terms like deficit, shortfall, gap, and shortage – frequently used within the housebuilding sector to describe the country’s housing situation – give the impression that we don’t currently have enough homes, that there is a gap between the quickly growing population and the not-growing-fast-enough housing stock. Just fill this gap, the argument goes, and house prices will begin to fall as the market becomes less competitive.
In reality, there are currently over 1 million more dwellings than there are households in England, and the number of empty homes continues to rise year after year. Before attributing that vacancy to expected “slack” in the market, look closely at the figures. Over 260,000 second homes are sitting empty, many of which are listed on vacation rental platforms like Airbnb or are simply vacant investment assets. Another 260,000 homes across the country have been empty and unfurnished on a long-term basis. In England, nearly 34,000 council owned properties are sitting empty, and in some regions nearly 1 in 10 dwellings are being used as second homes. Bringing together long-term empty homes, empty homes on track to become long-term empty homes, second homes, and other exempted empty homes (such as those left empty when an owner passes away), nearly 1 in 25 homes in England are out of use.
“It is crucial that the starting point for Labour’s housing ambitions include bringing existing empty housing stock back into use as social housing while retrofitting these homes in the process.”
This is not to mention that as much as 40% of all retail space in the UK is no longer necessary, with retail vacancy – now hovering around 14% – continuing to grow. Surplus retail floorspace can prove to be a vital alternative to new-builds, and recent changes to the permitted development rights have made converting retail space for residential use more viable in England.
Given what has unfolded in London over the past decade or so, we know that letting loose housebuilders and developers does not mitigate a housing crisis. Recent research by Action on Empty Homes shows that twice as many new homes have been built in the capital than new households have formed - yet instead of reducing affordability pressures, the number of vacant homes in London has risen by 80% over the past decade, with house prices doubling and rent increasing by 19% in real terms. We know that just building more homes won’t solve the nation’s housing woes - in fact, if developers are given too long a leash they will time and time again deliver the kinds of housing projects with the highest return: housing affordable only to investors that actively worsens the housing crisis by being built to remain more or less empty.
While new social housing is indeed necessary, it is crucial that the starting point for Labour’s housing ambitions include bringing existing empty housing stock back into use as social housing while retrofitting these homes in the process. This would quickly unlock a large supply of genuinely affordable housing while giving a boost to the growing retrofit industry by creating reliable demand for its skills and products. Having gained its balance working on empty homes, a scaled-up and efficient retrofit sector could begin to make serious headway decarbonising the UK’s housing stock, which must occur if emission reduction targets are to be met. This would also create new “green skilled” jobs, strengthen regional supply chains of sustainable building materials, and enable communities across the country to benefit from the work of decarbonisation.
In addition to revitalising and retrofitting existing vacant stock, new regulatory powers are required to address the root causes of vacancy and disincentivise the appropriation of housing for use as second homes, Airbnbs and investment assets. This should involve changes to the planning use classifications and permitted development rights to help prevent homes being moved out of primary residential use, as well as a licensing scheme for short-term lets and council tax increases on empty and second homes.
Unlocking empty homes, limiting the flow of housing into non-primary residential use and long-term vacancy, and scaling up retrofit across the UK must be focal points of any forward-thinking housing plan. A vague, unspecified target of 300,000 new-builds per year will not only burn through the UK’s 2050 carbon budget prematurely - it’s also likely to yield unaffordable and, indeed, vacant housing. What new housebuilding we do need must prioritise genuinely affordable, inclusive, and sustainable homes, not towers of luxury flats sold to investors only interested in land and asset values. But before we think about cranking up the output of new-builds to unprecedented and unsustainable levels, we need to think strategically about the spaces we’ve already constructed, particularly the over one million empty homes in England which are waiting to be put to use. It isn’t how much you build that matters, but what you build. Or better yet, what you’ve already built.