The number of households in England is projected to rise by 17% to 27.6 million by 2040 causing significant demographic change.
This would intensify pressure on an already stretched housing market, according to new research by multi-disciplinary development consultancy Marrons.
The findings highlight a growing imbalance between supply and demand, with more than 1.3 million households on local authority housing registers in 2025 and more than 320,600 social homes projected to be lost by 2040 if current trends continue.
The largest household growth is projected in the South West (20%), followed by the East Midlands, East of England, Greater London and the South East (18% each), while the North East is forecast to experience the slowest rise at 14%.
At the same time, the housing market faces a generational squeeze; first-time buyer households (25-44) are set to grow by 14% to 16.1 million, student-age and young professional households (19-24) by 9% to 710,800, and later living households (65+) by 36% to 9.4 million – reshaping demand across all tenures and housing types.
Dan Usher, economics director at Marrons, who specialises in housing need evidence, said “we are heading towards a structural mismatch between the homes England needs and the homes being delivered.
Household growth is accelerating across all age groups, but supply – particularly in social and affordable housing – is not keeping pace.
Difficult and costly to resolve
The scale of projected losses to social housing, combined with record waiting lists, points to a system under sustained strain. Without intervention, affordability pressures will intensify and access to homeownership will become increasingly out of reach for many.
The proposed changes to the National Planning Policy Framework, particularly policy HO7, place greater weight on delivering homes that meet evidenced need. This makes robust, up-to-date data more important than ever in supporting planning applications and unlocking sites.
The challenge isn’t just how many homes are built but whether they reflect the way people actually live – and will live – in the years ahead. Without a step change in delivery, we risk locking in a housing crisis that will become far more difficult and costly to resolve.”
Originally published in May 2024, Marrons has drawn on the latest datasets to update its Housing 2040 report. The new edition incorporates Office for National Statistics 2022-based household projections, published in October 2025, the first in more than five years covering overall 16+ household growth and age demographic breakdowns.
Supplementing this is local authority housing register data for 2025, providing a real-time view of unmet social housing need, alongside social housing stock movements from 2014/15 to 2023/24, including demolitions, Right to Buy sales and new completions.
The full findings, published in Housing 2040: Phase II, provide a region-by-region snapshot of England’s projected housing needs – offering a roadmap for developers, investors, registered providers and local authorities to plan homes that meet current and future demand.
Is The Government On Track To End Use Of Asylum Hotels?
Backlogs in asylum processing and chronic housing shortages have pushed hotels to the centre of the UK’s asylum accommodation system. With a 2029 deadline in place, the hospitality industry questions how realistic this transition is.
By 2029, the UK government has pledged to end the use of hotels to house people seeking asylum. The Home Office has declared that it is exploring a variety of short, medium and longer-term alternatives to hotels and the commitment has been framed as both a cost-saving measure and a reset of a system long under strain.
Yet behind that headline promise lies a far more complicated reality. While the deadline appears straightforward on the surface, the realities behind it paint an uncertain future.
The scale of the challenge is significant. As of September 2025, more than 36,000 asylum seekers were being housed in hotels, a figure that has risen steadily in recent months and represents a 13% increase since June 2025. Behind that growth sits a wider backlog of around 80,000 unresolved asylum cases, which has extended the length of time people spend in temporary accommodation and intensified reliance on hotels.
In the UK Budget Review, the Office for Budget Responsibility (OBR) recently flagged that spending on asylum accommodation is projected to reach £15.3 billion over the next decade as a result of a rise in the number of asylum seekers arriving by small boat, compared with its estimation of £4.5 billion made in 2019. The significant rise is driven by an increase in the total number of migrants who crossed the English Channel in small boats in 2025, which rose to 41,472, almost 5,000 more than the previous year.
The government says it has removed 50,000 illegal migrants and that they have taken steps to work closer with the French government and to reform the asylum process. While ministers point to falling small-boat arrivals and increased enforcement activity, the cost of accommodation continues to climb.
The Home Office maintains that faster decision-making and a move towards alternative accommodation will reduce reliance on hotel-based provision. According to the University of Oxford’s independent research centre, Migration Observatory, this could save the taxpayer at least £1 billion a year by 2028-29, with hotels costing on average six times more than other forms of asylum accommodation.
Ministers say the shift will involve working closer with local authorities as part of a move towards a full dispersal model. While the model has been in place since 2023, its effectiveness has been limited by planning constraints, housing supply pressure and local capacity, meaning a complete transition is likely to be gradual.
The hospitality sector warns that the structural conditions needed to make this shift are not yet in place. The rising number of people entering the asylum system, the shortages of suitable accommodation, the impact of lengthy planning processes and fatigue of years of underinvestment in housing supply, has exacerbated pressure on hospitality and accommodation sectors, exposing a gap between political ambition and delivery.
Industry voices pointed to a gap between policy ambition and delivery, with planning constraints, limited supply and unclear national guidance all cited as barriers. Operators raised concerns around commercial viability and reputational risk, while charities highlighted the human impact of long stays in unsuitable conditions.
The reporting also suggested that moving away from hotels would not remove demand but shift it elsewhere. Experts warned this could place pressure on HMOs, serviced apartments and public sector sites, raising questions about capacity and suitability.
Recent announcements from the Home Office indicate that this transition is now underway. Eleven asylum hotels have closed, with more expected to follow, as ministers move to reduce hotel use ahead of the 2029 deadline. Labour MP Alex Norris said the changes are part of efforts to cut costs and move people through the system more quickly.
As anticipated in earlier reporting, people are being relocated into alternative accommodation including large-scale sites such as military barracks. The government has confirmed that these forms of basic accommodation will expand as hotel use declines. However, there is limited detail on how this transition will be delivered at scale or how demand will be absorbed across an already constrained system.
These developments reflect many of the concerns outlined in the original feature. Questions remain over planning clarity, housing capacity and coordination between central government, local authorities and the private sector. The direction of travel is clear, but the conditions needed to support a full transition away from hotels are still not fully in place.