A new report by the Resolution Foundation exposes the UK housing sector as offering the poorest value for money in advanced economies, stressing the implications for living standards, energy efficiency, and housing policy reform.
The Resolution Foundation, a think tank, has released a report indicating that the UK provides the worst value for money in housing among advanced economies. The study categorised British homes as “expensive, cramped, and ageing,” with UK households facing higher costs for lower quality in comparison to those in similar nations. The evaluation highlighted several key issues, including smaller living spaces, older housing stock, and the financial burden of housing costs on UK residents.
In England, the average floorspace available per person is notably less than in countries such as the US, Germany, France, and Japan, with English homes providing just 38 square meters per individual. Moreover, about 38% of UK homes were constructed before 1946, a significantly higher percentage than seen in Italy (21%) and Spain (11%). This outdated housing stock contributes to problems such as poor insulation, leading to higher energy costs and issues with dampness.
Financially, if all UK households were to rent their homes at market rates, they would need to spend 22% of their income on housing services, a figure that exceeds the OECD average of 17% and places the UK behind only Finland in terms of housing expense among developed economies.
The government acknowledges the importance of addressing these concerns, with the Department for Levelling Up, Housing, and Communities emphasizing housebuilding as a key focus. Plans are underway to deliver one million homes within the current Parliamentary term, alongside reforms aimed at improving the planning system, the introduction of the Renters Reform Bill, and investments in affordable housing schemes to enhance both quality and affordability.
As the UK approaches a general election, the findings of the Resolution Foundation’s report are expected to ignite debate on housing policy, with both major political parties keen on appealing to younger voters challenged by high rents. The Labour Party, through Shadow Chancellor Rachel Reeves, has already expressed intentions to overhaul the planning system which she claims impedes economic prosperity.
Despite the low rates of second-home ownership in Europe, concerns persist regarding its impact on the housing shortage in the UK. The report also notes the poor energy efficiency stemming from the age of the UK’s housing stock and the longer-than-average commutes faced by a significant portion of British workers compared to their European counterparts. These findings provoke a call for urgent policy intervention to address the multifaceted housing crisis that has long plagued the UK, as outlined by Adam Corlett, principal economist at the Resolution Foundation.