The UK is simply not providing the homes people want, according to new research that shows a quarter of buyers are forced to buy a smaller home than they are looking for.

And the fault lies in the way government planning policy works, which requires housebuilders to build high-density homes on the limited land released for development, in other words, apartments, homebuilder Linden Homes, among others have said.

The clutch of reports follows hard on the heels of the government’s report on the affordability and supply of housing and argue that continuing with these proposals will make maters worse.

Another commentator, property website Propertyfinder.com analysed the mix of housing in the UK and then asked people looking to move how many bedrooms they hoped to have in their new home. The results show a startling mismatch between the homes that exist and the homes that people actually want to live in.

Annual oversupply of smaller homes

• 41% of the UK’s housing stock has 2 bedrooms, yet only 21% of home hunters are looking for a property of that size.
• In an average year, 240,000 homebuyers are forced to buy 2 bedroom homes when they would like something larger.
• Only 3% of homebuyers are looking for 1 bedroom homes, but because 9% of the housing stock has 1 bedroom, 76,000 are forced to buy a home of that size instead of a larger property.

Annual shortage of larger homes

By contrast, 30% of homes in the UK have 3 bedrooms, and yet 40% of respondents to the survey want to move to a 3 bedroom home. This means there is an annual shortage of 125,000 3 bedroom homes on the market.

Those wanting a 4 bedroom home are even worse off. Less than a tenth of the UK stock has 4 bedrooms, while over a quarter of homebuyers would like to buy such a home, bringing an annual shortfall of 224,000 4 bedroom homes changing hands.

In total this means that around one quarter of average annual home purchases are of homes smaller than the buyers wanted.

Oversupply of very large homes

Not all of those wanting 4 bedroom homes are forced to trade down. The research also revealed a surplus of 5 bedroom homes among the UK’s housing stock. A significant minority (8.5%) of those ideally wanting 4 bedrooms are buying homes with 5 bedrooms or more instead.

If the homes that buyers say they want actually existed, there would be 4.3 million fewer 2 bed homes in the UK, 4 million more 4 bed homes and 2.3 million more 3 bed homes.

Developers are building the wrong properties

The building industry is contributing to the problem by building homes of the wrong size. Data from smartnewhomes.com, a website specialising in new build properties, shows that as recently as last year, 68% of the properties for sale on the site were apartments, the majority of which have two bedrooms, and yet only 40% of buyers were looking for such accommodation.

By contrast 30% of the properties were detached homes, typically three bedrooms or more, while half of buyers were looking for homes of this size.

Availability, not affordability is the key

Although affordability will always be a constraint on people’s expectations, affordability is a simple function of supply. This is proved by the fact that there is a large oversupply of two bedroom flats, many of which are lying empty and unsold.

As a result, prices of these homes have been falling in recent months. The lack of availability of larger homes has in turn affected their affordability as excess demand and insufficient supply has increased the gap between the price of a two-bed and a three bed home. On average the price increment up to a three bedroom home is an additional £49,800 (source propertyfinder.com).

Government policy forces high-density building

The government must share the blame for the oversupply of two bedroom homes as planning requirements force a minimum number of homes to be built on a given site.

That means homes that are simply too small for the average househunter. John Prescott’s £60,000 home scheme is only going to add to the problem.

Nicholas Leeming, director of propertyfinder.com commented, "UK homebuyers are not getting the homes they want. New build is only exacerbating the problem. Developers are simply not responding to demand and government policy is not helping. There is a large surplus of new build 2 bed flats, often in trendy locations, which is contributing to the UK’s oversupply of 2-bed property. People actually want family homes."

Growing army of private landlords

Philip Davies, chief executive of Linden Homes said "The growing army of private landlords criticised in [the government’s] report is the direct result of the government's planning policy which requires housebuilders to build high density homes on the limited land released for development, in other words, apartments."

"Developments of family homes are becoming like gold dust as they fail to meet the criteria of local planning authorities who are dictated to by central government planning policy, meaning housebuilders are having to adapt their product to suit what they are permitted to build."

"Linden Homes built 70% houses and 30% apartments five years ago, but now this is reversed to 70% apartments and 30% houses and it is young families who are suffering."

"Hopefully this report will drive the issue home to the government. Local authorities should have more power to decide the housing mix required by their local community and housebuilders, who understand the market, should be permitted to get on with the job."

Stand back and look at the whole picture

And the National Association of Estate Agents also had words to say about the report, which simplistically states existing housing supply is not enough to meet current and future demand. "This may sound simple and obvious," said NAEA President Elect, Stewart Lilly, "but getting planning and infrastructure in place prior to building new homes is vital to solving the housing shortage effectively."

To get this right, you need to be able to stand back and look at the whole picture, rather than evaluating each part individually, points out Lilly.

"This is what the planners and local government have been getting wrong to date. Land availability and planning is the key. So, also is design and energy conservation with new homes."