UK house prices offer worst value for money of any advanced economy
Britons are paying more for less as the country’s housing stock offers the worst value for money of any advanced economy, behind the US, Germany and France.
UK households pay 57% more for the same housing as their counterparts in Austria, for example, and 36% more than those in Canada, according to a study from think tank The Resolution Foundation.
UK households pay more than any other of the 38 OECD (Organisation for Economic Co-operation and Development) economies in housing costs — bar from Finland — but are not getting their money’s worth.
High housing costs could reflect the cost of a superior quantity or quality of housing in the UK, but in reality they do not. The report shows that English homes actually have less average floorspace per person (38m²) than many similar countries, including the US (66m²), Germany (46m²), France (43m²) and even Japan (40m²).
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English homes also have less floor space, on average, than homes in crowded New York City (43m²). Overall, Brits get 24% less housing per person than Austrians and 22% less than Canadians.
As well as being cramped, the UK’s housing stock is also the oldest of any of European countries, with a greater share (38%) of homes built before 1946 than anywhere else.
For example, just 21% of homes in Italy, and 11% in Spain, were built before the end of the war. Older homes tend to be poorly insulated, leading to higher energy bills and a higher risk of damp, said the think tank.
Adam Corlett, principal economist at the Resolution Foundation, said: “Britain is one of many countries apparently in the midst of a housing crisis, and it can be difficult to separate rhetoric from reality. But by looking at housing costs, floorspace 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.
“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.”
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Housing in New Zealand offers the second worst value for money, followed by Australia and Ireland — all countries also gripped by housing crises.
To determine the actual market cost of housing, the analysis examined what it would cost to rent all homes — incorporating the imputed rents, or what owners would pay if they rented their home at market rates — to show how the market price of housing varies across a range of countries.
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