Homes in England are more cramped than those in New York City, according to new analysis that showed UK property offers the worst value for money in the developed world.
The Resolution Foundation found that the UK has the oldest properties in Europe and English homes have less floor space than many international peers, notably Germany, France and Japan. With 38 square metres (409 sq ft) on average per person, London homes are even more cramped than those in New York City.
In 2021, Hong Kong announced a new policy requiring developers to build flats no smaller than 280 sq ft after a seeing surge in shoebox homes, also known as “nano flats”.
The Resolution Foundation’s findings, which also show UK housing costs are also more expensive relative to general prices than in any OECD country, underscore the scale of the housing crisis in Britain. Many younger Britons are struggling to get a foot on the property ladder due to soaring prices, and the issue is rising up the political agenda ahead of an election expected later this year.
“By looking at housing costs, floor space and wider issues of quality, we find that the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy,” said Adam Corlett, principal economist at the Resolution Foundation.
“Britain’s housing crisis is decades in the making, with successive governments failing to build enough new homes and modernise our existing stock. That now has to change.”
What Hongkongers need to know about the UK mortgage process
What Hongkongers need to know about the UK mortgage process
The Resolution Foundation found that if all UK households were “exposed to the full brunt of the housing market, the UK would devote the highest share of overall spending to housing” to every OECD country except Finland.
Some 38 per cent of UK homes were built before 1946, higher than the level of 29 per cent in France, 24 per cent in Germany, 21 per cent in Italy and 11 per cent in Spain. That means British properties by comparison are poorly insulated and come with higher energy bills.
The cost of UK housing and rentals has been sent surging by the lack of supply along with an upswing in demand, particularly in the post-pandemic period. While higher interest rates cooled the surge in house prices, rents in the UK and London are rocketing at the fastest pace on record.
The UK has struggled to build enough homes to meet the demand with just 234,400 new homes added in 2022-2023. That’s despite the ruling Conservative Party presenting a target to build 300,000 homes a year by the mid-2020s in its 2019 manifesto.
Estimates by Capital Economics show that this now should be closer to 385,000 to bring real house price growth in line with the European average.
Additional reporting by SCMP reporter
