Pushing on string: Demand and supply

This article starts by reviewing the determinants of demand and looking at recent and current evidence on the extent of excess or unmet demand for housing in general and affordable housing within that, drawing on evidence from a range of recent studies and sources. It considers the future prospects for demand, including particularly demographic changes (migration, household formation), the labour market and incomes, highlighting the interaction of these with economic and market conditions, and the likelihood of quite significant divergence between regions. On the supply side it reviews some key features including the prolonged slump in output and gradual recovery, and limits on social housing output. Future prospects are reviewed, in particular the two key problems of localized nimbyist planning and the sluggish responsiveness of developers. Evidence is drawn from recent application of the author's sub-regional housing market model for England.