What’s the Bigger Priority for the UK Government? Housing, or the High Street?

If the issue is increasing high street vacancy, are new homes the solution? The answer isn’t obvious. There are grey areas, examples of where it can work and where it hasn’t. Are Permitted Development Rights the panacea? ING Media’s Head of Research, James Child, was invited to discuss this and more at the Association of Town & City Management’s ‘We need to talk about housing’ event in London in February.

Are we a nation of shopkeepers or a nation of homeowners? ING Media’s analysis of the UK’s digital landscape suggests the latter; measuring digital mentions across 2023 reveals that housing is mentioned five times more than the high street by the UK public.   

We are of course in election season. Housing, never too far off the top of the political agenda, is thrust into the spotlight when polling day comes into view. Government has failed to consistently reach its own target of delivering 300,000 homes a year, 15 housing ministers have been unable to reach a consensus on how this is achieved; throw in an economy wounded by Brexit, Covid, geopolitics and the premiership of Truss and Kwarteng and it’s clear why housing is a flashpoint on the doorstep.

Unaffordability is the problem. In the 1990’s house prices in the UK were approximately three times an average salary, today it’s nearer eight times. Homeownership has plummeted since the 90’s too; in the USA the percentage of 25–34-year-olds who own their own property has fallen 8%, in Germany it’s down 6%, France 3% and the UK down 22%. In a recent survey the UK also polled as the most negative country when those 25–34-year-olds were asked will you and your generation do better than the previous one. To compound this, a recent report even suggested that the UK is the second most unhappy country in the world (Mental State of the World Report, 2023). We really are a pessimistic bunch. But the stats don’t lie. Figures from Centrepoint Data Bank reveal that in 2022, 112,000 young people approached local authorities for social housing – up 8% on 2021. Finance, as much as supply, is a real issue.

How can the Government move the dial on this sentiment? A national mission is required. “We are the party of the builders, not the blockers.” Sir Kier Starmer’s rallying cry to the industry at last year’s Labour conference is perhaps remembered just as well as the now infamous glitter incident, by our industry at least. Along with his re-framed ‘Grey Belt’ commitment, Starmer is making all the right noises pre-election about getting shovels in the ground. That ground, however, will be contested. Hanging an electoral pitch off rampant building could work against the current opposition party. All those swing voters considering marking ‘x’ next to their Labour candidate at the ballot box might be dissuaded if they, like many, don’t really want a development built on their doorstep. 

Our analysis also reveals the importance of housing to voters. Surprisingly, only 10% of all digital mentions associated with housing is about the construction and building of new homes. Perceptions born from our real estate bubble, perhaps. The majority of the conversations are linked to affordability and anti-government rhetoric. The UK’s cities are talking the most about housing; mentions from London accounts for over half of the conversation (54%), followed by Glasgow, Liverpool, Brighton and Manchester, all on circa 10% each.

And it’s not just the young who are talking about housing; almost a third (29%) of digital mentions from ‘X’ (Twitter) come from 25–34-year-olds, but one fifth (20%) of conversations originate from 55–64-year-olds, with 16% from the 65+ bracket. This corroborates findings from our 2023 report  Understanding Communications in European Real Estate Markets, which revealed that Senior Living is the most widely discussed housing sector in the UK and Western Europe. In 2023, 19% of the household population is predicted to have lived alone, compared to 14% in 2008, according to Age UK.

Levelling-Up, dead in name but very much a priority in practice for whoever forms the next Government, can only be truly delivered with housing at its heart. In a recent Centre for Cities report, analysts found that UK cities (outside of London) have less agglomeration power than European competitors. Housing creates jobs, which drives investment into infrastructure, increases productivity, enhances growth and in the long run, raises additional receipts for the Exchequer. Growing the housing footprint can benefit the local economy too.

“Hear Ye! Hear Ye!” You can almost hear town centre managers across the UK crying out for some of that market stimulus. Yes, vacancy is high, and the high street is evolving (for the last time, not dying!). Is the answer staring us in the face? If the retail-centric model is being superseded by an experience-led ‘Return to the Agora’, is it time to mend our consolidated high streets with homes?

Despite recent woes, we know that good-will has remained from the public for high streets. A recent study from Market Financial Solutions (2023) revealed the UK’s love for a bustling town centre. Of those surveyed, 46% said that a vibrant high street would determine where they would live, some 27% of people suggested they would be willing to pay a premium for a great local high street and 19% admitted that the decline of their local high street was a reason for them to move away from the area. But – homes near the high street is different to homes on the high street.

Since Covid, the way in which we all interact with the built environment has changed significantly. From working from home to online shopping, dwell time, consumer spend, and location have all evolved – bringing back to life some of the countries more sleepy places. Will a scatter-gun approach to new housing will derail that hard work?

There is an argument to be made for A1 (shop) to C3 (dwelling house) conversion, yet surely some regulation is required to stop the fragmented nature of places being disjointed even further. The high street remains a deeply meaningful institution for civic congregation. For every sensitive landlord there will be one who wants to maximize profit. Surely, a bad shop makes a bad home?

Yes, housing is important, our data suggests at this moment in time, it is more important that the high street. Yet the public want assurances about the economy too. Jobs, services and infrastructure count. If the high street becomes another housing development, dislocation of employment follows, and people relocate. Pretty anti-levelling up, really.

Finally - people go in search of a home, not a house. Decisions aren’t binary. Affordability, supply and location define those decisions, but curation of high streets, town centres and cities do too. In tandem, they both create greater places for all. An over or under supply of either works against the other.

So – what is the bigger priority for Government? Housing. What sort of housing, for whom, and importantly where, will go a long way to ensuring that high streets of the future continue to play the important role they have done for centuries.

James Child
Head of Research, ING Media