The north-south divide: Why a housing catch-22 is strangling supply across the country

There's something fundamentally broken about England's housing market and new research has finally put numbers on what many of us in the industry already knew.

Zoopla's recent analysis in its Viability of Homebuilding Report reveals a stark truth: where it makes economic sense to build homes, ordinary families can't afford them. And where homes are affordable, the economics of building them simply don't stack up.

It's the ultimate housing catch-22 and it's strangling supply across the country.

The brutal reality of building

The numbers make for grim reading. Just 36 per cent of England is currently viable for typical family housing development. We're essentially trying to solve a national housing shortage using barely a third of the country.

Since 2022, the report says costs have jumped by 17 per cent (in my experience, it’s more like 50 per cent) whilst house prices have barely moved - up just one per cent.

You don't need a business degree to work out that's unsustainable.

The result is predictable: housing starts are down 40 per cent from early 2022 levels. Planning approvals have fallen by a quarter. The industry is pulling back because the sums don't work.

Two different countries

Take a look at the map in the report. In southern England, two-thirds of areas can support viable development.

But these are exactly the places where local buyers are priced out of the market.

Meanwhile, in the Midlands and northern England - where I've built my business - only 13% and 10% of areas respectively make economic sense for developers.

This isn't just unfair - it's economically destructive. We're choking off supply precisely where it's most needed.

The demographic time bomb

The research doesn't specifically mention bungalows, but anyone serious about housing needs to consider our ageing population.

We're building the wrong homes for the Britain we're becoming.

At Horgan Homes, we've recently launched St Helen's Place in Mareham Le Fen - 30 contemporary dormer bungalows marking our first development in Lincolnshire.

When 38% of older homeowners want bungalows but less than 1% of new builds are single-storey, we're not just facing a supply crisis - we're building (when we can afford it!) for yesterday's market, not tomorrow's.

Beyond the soundbites

The government's planning reforms make for good headlines but they miss the fundamental point.

You can streamline planning all you want, but if the economics don't work, houses won't get built.

There are no easy answers here. Simply pushing house prices higher might help developers' balance sheets, but it would price out even more buyers. We'd be solving one problem by creating a much bigger one.

What we actually need is grown-up thinking about costs and demand. Regulatory reviews that understand real-world economics. Targeted support for buyers in regions where affordability is killing demand.

And recognition that smaller builders face very different challenges from the volume house builders who dominate policy discussions.

Time for honesty

The report reveals that we simply don’t have the conditions that would give builders confidence to invest at scale. Not the land, not the skills, and - as this research confirms - not the economics either.

This north-south housing divide isn't just a technical problem for civil servants. It's why your neighbours can't afford to buy whilst perfectly good development sites remain empty.

The Government's 1.5 million homes target sounds ambitious. But unless we tackle the fundamental economics of home building, it will remain exactly that - just a target. One we’re going to miss by a country mile.