The people of East Lindsay must have been in for a huge shock last year. According to the census update, there were not, as previous figures suggested, about 390 homes being built each year in the largely rural area of Lincolnshire, which surrounds the seaside resort of Skegness; There were 2,330.
However, even from the top of The Odyssey — the tallest roller coaster at a local theme park — you'd have a hard time seeing any sign of these clusters of new homes: there aren't a lot of cranes filling the skyline or roads clogged with trucks. No boom Both in local residents. So where are they?
A closer examination of the census data reveals a clue: the recount picked up a large number of static holiday caravans parked near the North Sea coast, which it then added to the housing stock.
It's not clear whether these holiday caravans are responsible for all this increase or if there's a lack of historical data, or some sort of classification problem, but it points to an uncomfortable and often overlooked truth: we don't really know how many new homes there are. We build every year in England. The number depends on who you ask.
For a government with a clear target for housing construction – 1.5 million new homes by 2029 – this is a problem. It represents another sector in addition to immigration and employment, where the quality of official statistics is very poor.
If you go to the Office for National Statistics website and download house building data for England, you will follow a long line of politicians, journalists and even academics using data that is not fit for purpose. Even if you look to the original source – the Department of Housing, Communities and Local Government – you will end up in trouble if you click on the wrong link: the most widely used house building data in this country actually understates the number of new builds completed. And in a large quantity.
The ONS data is largely based on building control figures, a market historically dominated by the National House Building Council (NHBC) – an organization set up to offer warranties on new homes due to concerns about poor construction quality in the 1930s. However, in the past two decades, NHBC's market share has declined – from about 85 per cent to about 60 per cent. Although building control data has improved slightly since 2017, by making it less reliant on NHBC data, there is still a significant undercount.
There is a more robust count of new homes, which is published as part of the government's Net Additive Dwellings (NAD) reports. This allows us to understand the size and location of the missing count in the building control data. For example, it shows there were around 158,000 completions across England in the 2023-24 financial year, while the more accurate NAD completions data shows there were 199,000 – a difference of 25 per cent, or 40,000, or About the size of the city of Bath.
The lower number is greatest in areas with a greater diversity of homebuilders. While the long-term trend is one of increasing dominance by large listed housebuilders, the market has actually become more diversified over the past decade. In many places, there has been an increase in activity in everything from small housebuilders and housing associations, to build-to-rent investors and luxury property developers – at least until interest rates started to rise. It appears they were looking elsewhere for their construction guarantees.
This means, for London, that the building control data is deeply flawed. For 2023 and 2024, NHBC data shows around 16,000 new buildings have been completed, while NAD figures show there are more than 28,000 – and the more comprehensive Greater London Authority data suggests nearly 32,000 have been completed. So it appears that Building Control data is missing almost half of the London house building market!
In markets where traditional, high-volume homebuilders still dominate – for example, suburban developments on the fringes of cities, building control data is still very useful. Although even in places like Milton Keynes, where there has traditionally been a good link between building control and NAD data, there are signs in recent years that it may be failing, as tenant developers and others move in.
England is not the only country struggling to calculate the number of homes it builds: Ireland has overestimated housing deliveries in the past because it relies on electricity connections to account for new properties. The return of vacant cowsheds, outhouses and homes to use has contributed to this Housing delivery numbers rise. When the methodology was revised in 2018, it reduced the number by about 58 percent.
Measuring how many homes we build isn't just important because of government Housing goals (Which is actually based on net additions, a measure that includes usage changes and conversions.) Understanding who is building new homes and where is essential to ensuring policies are fit for purpose – not just to meet targets.
It can also affect your own investments. Increasing numbers of UK pension funds are investing in residential property, particularly through the build-to-rent market. A lack of accurate public information about who is building what and where may cause their investments not to perform as expected. At the same time, other organisations, including a large listed housebuilder, still frequently refer to London's underbuilding monitoring data to highlight the sheer scale of the capital's housing undersupply. The magnitude of the undersupply compared to targets is still significant but not as large as it regularly suggests.
Although the NAD data represents a clear improvement over the BC numbers, this is not perfect. It is published only annually with an eight-month delay. As GLA data for London shows, the lack of historical reviews prior to 2019-2020 means the data may be underestimating the number of completions because some take longer to be recorded. We also don't really know how far back the undercount goes. The late Dr Alan Holmans, an expert in housing statistics, expressed doubt that dwellings completed in the 1990s – and perhaps even earlier – would have been fully recorded.
To deal with missing completions, NAD data are revised every 10 years when the last census is released. However, we do not know whether the missing homes were newly built or from another source, nor do we know how long these homes had been in possession or who built them – hence the disaster in East Lindsay, where the number of homes added to the total GDP. The number represents a third of the national adjustment of 5,890 homes per year for the period between the 2011 and 2021 census.
If nothing else, it shows that if the Government really wants to meet its housebuilding target in this Parliament, perhaps it should focus on building static holiday caravans outside Skegness.
Neil Hudson is a housing market analyst and founder of consultancy BuildPlace
