Research reveals largest gap between housing need and supply since 2019
The gap between the increase in social and affordable housing and the growth of the non-working population in England has reached its widest point since 2019, according to new research from Search Acumen.
The property data provider found that, over the past year, the disparity between these two rates has expanded by 173%, with 12 additional economically inactive people for every new affordable or social home built.
Search Acumen’s analysis estimates a potential shortfall of 296,606 affordable and social homes in 2024, highlighting the scale of England’s housing deficit. The data also indicates that, since 2019, the rise in economically inactive individuals has been nearly ten times greater than the increase in the working-age population.
While the research focuses on England’s social housing, it suggests similar challenges are present across the UK. The findings point to ongoing pressures on the government to address the housing crisis.
The report notes that 2023 saw the highest annual population growth in more than 75 years, while the number of new affordable home starts fell sharply. In 2024, affordable home build starts dropped by nearly 38%, marking the largest annual decline in a decade and the lowest level since 2015.
In London, starts on affordable homes decreased by 88% between 2022 and 2024, with just nine units started under the London Affordable Rent scheme. This drop follows the conclusion of the 2016-23 Affordable Homes programme, previously the main funding source for such projects.
“Our research looks at trends as to whether we are building enough homes fast enough,” said Andrew Lloyd, managing director at Search Acumen. “We know the answer of this to be no, but what is troubling is just how far behind we really are.
“In England, there were approximately 4.5 million social homes, down from 5.5 million in 1979 thanks to long-term losses in demolitions, conversions, and inadequate rebuilding. Looking at social rent alone, over the past decade, there was a net loss of 177,500 homes in England, meanwhile the waiting list climbed to 1.33 million households last year up 10% since 2022.
“Forecasts suggest this could rise to 2 million households by 2034 if social homebuilding stays unchanged. With a growing base of people not working, the mismatch between supply and demand is acute.”
Lloyd added that closing the gap will be a significant challenge for the current government, but noted that Labour has expressed a commitment to addressing the issue. He pointed to economic challenges, including tighter margins, rising costs, and labour shortages, as obstacles for housebuilders.
The research also found that planning permissions granted for major residential developments in England—often including affordable housing under Section 106 agreements—are now nearly half the levels seen during the peak years of 2016 to 2018, representing a 41% decline.
Combined with profitability pressures and fluctuating private demand, these factors have increased challenges for housing providers, according to Lloyd.
“I believe this is an inflection point for the sector,” he said. “Post-war, we saw government funded Local Authorities creating a housing boom – something we are about to see again under Labour, driven by social need not private enterprise. “The government’s £39 billion Social and Affordable Homes programme, announced earlier this year, is expected to provide support for providers over the next 18 months.
“While the working population rate is declining against a general ageing population that is demanding more of social care, it begs the question: where will people live. As the commercial viability of building large scale developments is coming under more and more scrutiny with the end of Help to Buy and ever-tightening profit margins, the social housing need must be met instead by the public sector. While it is socially responsible to build affordable homes, it may not be profitable – this means the government have a duty to act with more funded schemes likely to fill the void.”
Lloyd predicted a potential increase in social housing activity that could be reflected in government data by next year. He advised property lawyers to prepare for increased demand from housing associations, local authorities, and other registered providers in the final quarter of 2025.
According to the Institute for Fiscal Studies, real-term spending per person by local authorities on planning and development services has fallen by 59% since 2010. Lloyd noted this will likely drive greater reliance on technology to address skills and resource shortages.
“Lawyers on both side of the transaction must use technology to plug the gap, there is no doubt about it,” he said. “To work on social housing caseloads means high volume and low margins, where AI tools become business critical for lawyers to win at tender.
“Simply put, technology is the only way we are going to be able to deliver any large quantity of houses at pace and within the current government.”
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