Despite being England’s slowest-growing region, the North East needs to build at least 112,300 new homes in less than two decades to meet the needs of its 2040 population, research by socio-economic experts at Marrons has revealed.

With 2.3 million people aged 16 and over expected to be living in the North East by 2040 – including 695,530 people aged 66 and over, 651,556 first-time buyers (25-44-year-olds), and 174,003 of student age (18-22) – the analysis highlights the pressing need to accommodate the region’s demographic growth.

Social housing stock in the North East is estimated to plummet by an additional 32,742 properties by 2040 despite 59,663 people being on their local authority’s housing register in 2023. The research also identifies high levels of under-occupancy, with 165,624 people aged 66 and over residing in homes larger than necessary (two or more bedrooms unoccupied) in 2021. If this trend continues, 234,451 65+ households are expected to be under-occupied in 2040.

Dan Usher, economics director at Marrons, who specialises in housing need evidence, said: “The overall 16+ population in the North East is expected to remain fairly steady in most local authority areas. However, this demographic remains a hugely important segment of the housing market. The first-time buyers of 2040 are teenagers and young adults living with their parents today, so they will be completely new entrants to the housing market.

“The demographic that is poised for growth in the North East is those aged 66 and over, which is due to rise by 29% to 695,530 in the region. People residing in homes larger than necessary is also prevalent among this demographic, with an estimated 49% (234,448) 65+ households in the North East expected to be under-occupied in 2040. Later living, therefore, is the part of the housing sector with the greatest growth potential, presenting strong opportunities for developers to invest in this market.

“Building a range of homes to suit many different needs is not only a priority but a necessity. It creates more choice, aids first-time buyers onto the property ladder, gives expanding families additional space, helps the ageing population downsize and live in homes more suitable for their needs, and adds to the supply of affordable housing.”

Among the region’s local authorities, County Durham is poised to experience the most significant decline in affordable housing (5,742) and largest uptick in its first-time buyer demographic (5% to 127,380).

North Tyneside will have the most substantial increase in those aged 66 and over (35% to 55,853); and Middlesbrough is forecast to see the greatest surge in its student-age population (17% to 10,592). Despite being home to two universities, Newcastle upon Tyne will see just 3% growth in its student-age population, in contrast to Gateshead’s 14%.

Utilising the latest Office for National Statistics Census data (2021) and 2018-based population projections, Marrons has painted a clear picture of England’s housing need in 2040. Supplementing this is data from local authority housing registers, affordable housing stock records and extrapolated housing requirement figures using the government’s standard method.

Simon Macklen, partner and head of economics at Marrons, said: “England is poised for significant demographic change over the next two decades, bringing forth new challenges and opportunities in the housing sector.

“In examining the data, it becomes evident there is a significant need for general market homes to accommodate the growing population. As well as meeting this basic need, more could be done to provide greater choice and acknowledge the positive impact of specialist and affordable homes as part of a functioning housing market, much of which can be facilitated through market-led development at scale.

“Already, England has been named as the most difficult place to find a home in the developed world, and our ageing population and rising property prices will only exacerbate the problem. If we are going to meet the requirements of the population in 2040, we need to prioritise the needs of future residents and start building the right homes today.”