Are NIMBYs or migration driving the UK’s housing shortage?

The UK is grappling with a severe housing shortage, with the country having the second fewest homes per 1,000 people among major Western European nations. To catch up, 6.9 million additional homes are needed. This shortage has been attributed to two factors: the difficulty in building homes and expanding the housing supply (YIMBYs), and the rise in migration inflating demand for scarce properties (migration hawks).

The UK needs 6.9 million more homes to reach the average, and England accounts for 6.2 million of these gaps. Historically, England has lagged behind in housing development, with a paltry 178,000 homes built per year since the 1980s, while France has built 246,000. If England had followed France's pace, it would have 2.9 million extra homes, closing half of England's housing shortage.

Even with the government's target of 300,000 homes annually, it is unlikely to be met. France's housing stock has expanded faster than its population since the early 1980s, whereas England's homes per 1,000 peaked in 2021 before declining. Migration's impact on the housing shortage is evident; if net migration had been capped at 100,000 annually since 1997, England would have 473 homes per 1,000.

This would reduce house prices by about 5.2%. Both YIMBYs and migration hawks provide crucial insights into the UK's housing crisis, indicating that building more homes and managing migration levels are essential steps to tackle the problem.