Bigging up new homes

Words:
Brian Green

Our living space is growing again, says the Home Builders Federation. But is the HBC under-reporting its findings, and what are the causes behind the shift?

New homes are getting bigger. That at least is the claim of the Home Builders Federation in a new report titled ‘Goodness spacious me’.

The message house builders are sending in this report is that they have not only greatly expanded the number of homes they have built since the depths of a crippling recession, but they are also now building larger homes with more bedrooms.

Given the media beating suffered by major house builders over the years for building ‘rabbit-hutch homes’, not least from architects, it’s no surprise their lobbyists are making a show of their shift towards bigger homes.

And the data provided does show a substantial increase in the size of homes being built as the industry has emerged from recession. It suggests the floor area of an average new home has risen from 801ft2 (74.4m2) in the year to March 2009 to 85.3m2 in the year to March 2016, while the average number of bedrooms is up from 2.44 to 2.90. As a reference, it is worth noting that on average in England there are 2.3 people per home.

Geographic coverage is not made clear in the report. The data for the number of bedrooms is taken from DCLG tables which cover just England, so we must presume the estimates all relate to England. 

The floor area figure is derived from estimates by the Home Builders Federation (HBF). Interestingly, we can check the accuracy of the HBF estimates using another source – the Energy Performance Certificate (EPC) which has been required for all new homes since April 2008. The data collected also usefully tells us the size and type of newly built homes and homes rented or sold. 

You have to be a bit cautious for a number of reasons, not least because the recorded new homes are likely to include conversions and change of use, so definitions may differ from the data collected by the HBF.

However, two immediate points emerge from exploring the EPC data. First, it would appear the HBF has perhaps undersold the size of new homes built in England of late. Chart 1 shows its estimate of the average size of homes over recent years compared with the average that emerges from EPC data. The latter suggests new homes are about 10% bigger than the average estimated by HBF. This may well be down to the sampling including too few builders of much larger homes. Either way, the HBF does not look to be exaggerating.

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Secondly, new homes built in recent years compare pretty favourably with the average home in England as measured by the average recorded by the English Housing Survey over three years (94m2). What is more, the not-new homes sold or rented (dotted yellow line) captured within the EPC data have tended to be smaller than the new homes built. It would appear that, across England, new homes built have been bigger than not-new homes in the market – for sale or rent. The EPC data does of course not include a random sample of all existing homes, so does not provide a measure of the average size of existing homes.

But here the use of averages can be as misleading as it is informative. The range of sizes of homes is great: the English Housing Survey data points to rural homes (165m2) being more than twice the size of urban homes (76m2) and almost twice the size of suburban homes (91m2). For all that almost half of homes lie between 70m2 and 110m2.

There is a suggestion that Help to Buy has encouraged buyers to miss a rung on the housing ladder and buy a bigger home that better meets future rather than immediate needs

So a switch in mix of location of where new homes are built or where existing homes are rented or sold would almost certainly affect the overall average size within the EPC data, as would other changes in market demand, such as a shift in the types of households moving or buying for the first time.

The HBF makes much of the shift in policy away from one that pressed for higher density as one reason for the rise in the average size of new homes. There is also the suggestion that Help to Buy has played a part through encouraging buyers to miss a rung on the housing ladder and buy a bigger home that better meets future rather than immediate needs. The relative increase in the proportion of three or four-bed homes at the expense of two-bed homes tends to support this.

There is much discussion also of the comparison of UK homes to those abroad. Here we can turn to Eurostat data. No data is perfect and we really can’t be expected to know whether the definitions and collection methods used by each country are fully consistent, but Eurostat is pretty good at this sort of thing. Unfortunately the UK does not provide data on this measure to Eurostat, but using the English and Scottish Housing Surveys we can estimate that the average size of homes in Britain is, on our calculations, 94.3m2. On the assumption that this is the average home size for the UK and is comparable with the Eurostat data, it seems the size of the average UK home is pretty much on a par with Italy, France and Germany (Chart 2).  

Interestingly, the UK appears to have larger homes than Ireland, but much smaller homes than the more densely populated Belgium and noticeably smaller than homes in the also more densely populated Netherlands.

Now here’s a curiosity worth pondering. If we plot national population densities against national average dwelling floor areas, the suggestion is that more densely populated nations have, on average, larger homes.

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