While the coronavirus pandemic initially brought shortages of pasta and toilet rolls, one thing that has not been in scarce supply is time to take stock of the world around us. Coupled with the fact that the majority of Brits have been mostly cooped up indoors, the opportunities to consider just how dysfunctional the UK’s housing market is have rarely ever been more plentiful.
Before getting into that, first some context. Housing in the UK, whether bought or rented, is expensive. It can be insecure. In several ways, it epitomises many of the perceived injustices around intergenerational unfairness. Overwhelmingly, the single reason behind all of the issues caused by the housing market can be traced back to a lack of supply. And this is almost solely explained by government policies which prevent such supply from expanding.
Much of the legal framework which underpins planning in the UK can be found in the Town and Country Planning Act 1947 (TCPA). This policy embodied the ethos of the Attlee government which introduced it, where faith was placed in the “wisdom” of the state to make rational economic judgements. In practice, however, it simply ossified the supply of housing, by dictating exactly where new properties can be built.
Though the TCPA did earmark some land to accommodate for expected population growth, the sheer magnitude of the socio-economic changes observed in the decades since its introduction means that the regulations it sets out are now at breaking point, causing various damaging ramifications to transpire.
Perhaps the most pertinent is how the TCPA has caused the price of housing to skyrocket. An average house in the UK clocks in at just over £231,000, around 7.6 times average annual earnings. In the capital, average prices more than double to slightly under £477,000, approximately 12.5 times the typical London salary. Anyone with even the most superficial understanding of economics will know that when supply cannot meet demand, prices can rise virtually unchecked. Housing is no exception to this rule, and the TCPA is largely to blame.
From this, a whole host of other problems flow. Families are forced to cram themselves into lodgings which are patently inadequate for their needs because they simply cannot afford more spacious properties. Landlords enjoy a more privileged position than they might otherwise, allowing some to feel they can mistreat tenants, particularly at the lower end of the market. On the other side of the same coin, perhaps cognisant of their precarious situations, tenants might feel powerless to push back on poor conditions for fear of being evicted.
The costs of our outdated planning system are not limited to individuals or families, however. I wrote about that in Green Market Revolution, a new publication from the British Conservation Alliance and the Austrian Economics Center. In my chapter, I explain how the TCPA threatens the environment as well. Fixed firmly in my sights are Britain’s “green belts” – areas of land where development is highly restricted or altogether impossible – which the TCPA laid the foundations for.
While giving the pretence of environmentalism, green belts actually create a myriad of unintended and ecologically damaging consequences. First of all, there are plenty of instances of “green” belts being anything but. Whether it’s a garage in Tottenham Hale, a waste plant in west London, or countless other scrappy strips of scrubland, green belts don’t always conform to the image of verdant woodlands or rolling hills which their supporters might wish.
Second, roughly two-thirds of green belt land in England is devoted to agricultural use. Though perhaps seeming to be the prime embodiment of “naturalness”, farming – especially when done intensively – is often less “green” than urban parkland or even private gardens. Counterintuitively, therefore, it could be ecologically beneficial to open up the areas of agricultural land that are most intensively farmed to new development.
Finally, while green belts prevent the building of homes where people would otherwise demand them, they do not stop construction entirely. Rather, developments often simply spring up just on the other side of the green belt in question, perhaps in the form of satellite towns. Ironically, these developments might be built on land that is actually of more remarkable environmental quality than that inside of green belts.
Of course, people living in towns and villages created by such displacement often want or need to commute into whichever city lies beyond the other side of the very green belt which has forced them to live further away from where they ideally would like to. This simple fact necessitates the construction of new transport links, like railways and roads, running directly through the green belt. This leads to a second irony, as it could well result in more of the concreting-over that green belt proponents claim to oppose so ardently.
Moreover, by artificially keeping people further away from where they wish to work and socialise, the opportunities for them to make use of low-carbon modes of transport, such as walking or cycling, diminishes greatly. More are likely to opt to drive, which only serves to exacerbate car dependency and increase air pollution and greenhouse gas emissions.
The UK’s housing market is a mess. Not only does it inflict a great deal of social problems, but it is environmentally harmful too. When we finally emerge from the clouds of the coronavirus pandemic, the government should be bold in its ambition to reform the planning system, starting with a shrewd appraisal of the efficacy of green belts.