Building the houses we need

A new report seeks to demolish the excuses made for Britain's paltry housing stock.

Adam Hibbert

Topics Politics

Turning around a supertanker as massive as the heavily regulated British housing market is not the work of one workshop. But the launch of a publication by the Tory think-tank Policy Exchange, ‘Unaffordable Housing: Fables and Myths’, on 20 June in Westminster, marks an impressive yank at the wheel.

Past projects in this direction include James Heartfield’s manifesto for paving the greenbelt in the architects’ bible Blueprint (January 2002), and the 2004 publication ‘Why is Construction so Backward?’ by the campaign organisation

The Policy Exchange publication is by Professor Alan W Evans, director of the Centre for Spatial and Real Estate Economics at Reading University, and Dr Oliver Marc Hartwich of Policy Exchange. Their thesis is simple, and spicily evidenced. In comparison with European nations of similar or greater population densities, the UK’s housing stock is composed of the oldest, smallest, most sub-divided (densely occupied) homes, and all at significantly higher prices. Despite real wage increases, our new-build stock (post 1980) is smaller still, and of lower quality than our pre-war stock – the diametric opposite of the trend in countries such as Germany, the Netherlands, Denmark, and Belgium. The UK planning regime is replete with perverse incentives to prod people into accepting a product they don’t want, in places they’d prefer not to live.

In this first of a three-part investigation, the authors attempt to destroy the various apologia offered for the UK planning system’s strangulation of housing development. Isn’t Britain too overcrowded already to build nice new homes? No – to take the case of just one of our continental cousins, the Netherlands, double the proportion of total territory is urban (16 per cent to the UK’s eight per cent). Isn’t the South full up, while the North is wide open? To the contrary – the South West and East Anglia are markedly underdeveloped by comparison with the North West. But the South feels urbanised, doesn’t it? That’s because point-to-point travel in the South is confined to urban corridors, and most of your journey is spent at low speeds escaping and entering urban zones, not in the wide open spaces through which you whiz at (ahem) 70 miles per hour.

Isn’t urbanisation bad for nature? To the contrary, low-density development sustains far greater biodiversity than monocultural farmland. Doesn’t fuel use increase with suburban sprawl? Not necessarily – the research shows that other factors overwhelm any minor advantages that high-density development theoretically promises, while hybrid cars already entering the market realise far greater efficiencies. Mustn’t we preserve our agriculture to ensure the UK’s ‘food security’? The UK devotes an exceptionally high proportion of land to agriculture, producing a whopping surplus, to be dumped on the international market at great detriment to third world farmers.

Isn’t brownfield the best and only way? If it were, we could only build 14 per cent of the new homes that are needed – there just isn’t enough brownfield. Couldn’t we house everyone in vacant property? The vacant property rate in the UK is on the low side, by international comparison, helping to make the market illiquid and laborious to move within – at a lower rate, it could grind completely to a halt. And of course, many properties are empty because they suit nobody’s needs. Robust statistics are offered to back up each answer.

So far, so good. The next stage in their critique will be a report on how other European Union (EU) countries have avoided the worst perversities of the UK regulations – building high-quality, capacious new homes at an enviable rate and bringing them to market at a credible price. A third segment will draw some policy conclusions.

As an economist, it’s likely that Evans will constrain himself to hazarding solutions mainly within the balance of incentives established by fiscal policy, or within the technical, regulatory framework which channels such economic decisions. For example, he hints at one possible solution to the ‘not in my backyard’ (NIMBY) problem – allowing developers to ‘compensate’ potential protesters with a windfall pay-off. (At the launch of the report, he mentioned the case of one Sainsbury’s development that effectively applied this Bevanite approach, stuffing potential NIMBYs’ mouths with gold.)

Such technical suggestions could attract boondoggles. In the ‘compensation’ example, for instance, Evans’ technically sensible answer could mutate into yet another layer of perverse incentives, in which those of us who accept the need for more development, even in our own back yards, are encouraged to protest to ensure we don’t miss out on our windfall payment. The potential for arbitration of such incentive schemes will not leave any keen bureaucrat or lawyer idle. Indeed, heads from the Greater London Authority (GLA) and other such bodies nodded enthusiastically along with much of Evans’ presentation at Policy Exchange.

What is required is a political battle – not a series of technical fixes that further distance people’s attitudes from the process. Rather than offering to bribe NIMBY protesters, the NIMBY in all of us will have to be won over to the realisation that we simply need more housing, quite often changing cherished landscapes in the process. Against this argument will stand the full weight of property owners up to their eyeballs in mortgage debt, who currently treat their bricks and mortar as the only pension plan worth paying into. The Campaign for the Protection of Rural England might seem the louder heckler, but politicians of all hues will have a feel for which constituency wields most votes.

New Labour lacks the social base to take such a stand – in this area, it stands or falls by its previous Bevanite schemes to line the pockets of property-owning voters. Its buy-to-let deregulation and latest proposed subsidies to home purchasers could not be better designed to whip Middle England ever further into house price investment (stiffening its protectionist attitudes). Can the Conservatives take up the cudgel? Historically, as proposer of many of the worst aspects of the UK’s existing constraints, the Conservatives have spoken for those who prefer to keep the proles tidily out of sight, over a Green Belted horizon. It seems incredible to suppose that such influential voices will cease to be heard within Conservative HQ.

Any other takers?

Unaffordable Housing: Fables & Myths is available from Policy Exchange, priced £10.

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Topics Politics


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