Inadequate housing supply has led to the rise of the homeowner housebuilders

The latest research by London lettings and estate agent, Benham and Reeves, has revealed that there has been an increase in the level of homeowner housebuilders taking it upon themselves to improve their properties, as a below par level of housing delivery has left them no choice, having failed to return to pre-pandemic levels.

Benham and Reeves analysed Gov data* on both the current and historic level of dwellings completed across England and the level of householder development decisions submitted as a proportion of all decisions, to reveal the increasing trend of homeowners taking it upon themselves to build the homes they want and need.

The research shows that, during the initial pandemic year of 2020-21, the number of dwellings completed across England plummeted by -12% in a single year, totalling just 154,660. This figure has since rebounded to 174,440 in 2022-23, albeit this figure remains -0.5% off the pre-pandemic peak of 175,330 seen in 2019-20.

However, based on current figures for the 2023-24 year, the number of dwellings completed is expected to once again plummet to 155,974 – a year on year fall of -10.6%.

With such an inconsistent and inadequate level of housing delivery to meet demand, further analysis by Benham and Reeves shows that homeowners are taking it upon themselves to fill the void left by housebuilders.

Householder developments are defined as residential planning permission applications that don’t include a change of use and concern improvements made to just a single property such as extensions, loft conversions, conservatories or any other structural change to the property or surrounding grounds.

The analysis by Benham and Reeves shows that in the year between Q4 2022 and Q3 2023 (latest available data), 189,109 householder development decisions were submitted across England, equating to 54% of all total decisions submitted – including major and minor development applications.

This marks a 3% increase in the last five years (Q4, 2017 to Q3, 2018), when householder developments accounted for 51% of all development decisions submitted across England.

Across the North West, the number of householder developments as a proportion of the total has increased by 5% in the last five years, while in the West Midlands it’s up 4%.

However, it’s the South East that’s home to the highest proportion of homeowner housebuilders, where 60% of all decisions submitted in the last year have been by homeowners looking to improve their current property.

The East of England (57%) and North West (56%) are also home to above average proportions.

Director of Benham and Reeves, Marc von Grundherr, commented:

“Although we have seen an annual increase in the number of homes being delivered in recent years, we’re yet to see a return to the pre-pandemic peak where annual completion levels are concerned and the issue of supply is only forecast to get worse this year.

With another Budget likely to focus on vote winning initiatives aimed at initially fuelling demand, rather than focussing on the long-term issue of building enough homes, we can expect more of the same when it comes to the shortage of homes being built going forward.

Given this fact, it’s no surprise that homeowners are increasingly taking it upon themselves to improve their current homes, however, it’s quite astonishing that householder development decisions account for over half of all decisions submitted on an annual basis.”