The government must empower the free market to deliver the homes that people want

Samuel Prosser

May 18, 2021

The effects of Britain’s housing crisis have been well documented and the problem has only worsened over time, with the government and politicians  seemingly incapable of finding a permanent, workable solution.

The planning reforms recently announced in the Queen’s Speech, with designated Growth, Protection and Regeneration zones, are a positive step towards fixing this historic issue, however, these changes do not amount to a comprehensive overhaul of the system.

We know the decline in homeownership is stark, particularly among younger age groups: parliamentary research shows that only 41 per cent of millennials owned their own home in 2019/20, compared to 59 per cent in 2003/04. At the same time, the proportion of homeowners aged 35-44 years old fell from 74 per cent to 56 per cent.

As long as there is an insufficient supply of housing, the crisis will continue to have serious knock-on effects, not least for younger workers, many of whom are left unable to take up new employment in different areas of the country due to the burden of housing costs.

Fixing the housing crisis is not only likely to improve labour mobility and productivity but, crucially, it will give young people the opportunity to have a stake in our property-owning democracy. This is one of, if not the greatest domestic issue for politicians of all creeds and will be a decisive vote winner among the younger generation, yet there still seems to be a reluctance to make the big changes needed to solve it.

The government did introduce some welcome measures during the pandemic, such as the stamp duty holiday to try and alleviate pressure on buyers, however these short term fixes will do little to address the problem at large, especially without a strong long-term strategy to increase housing supply.

After the lack-lustre results of Help to Buy, Rishi Sunak announced in this year’s budget a new mortgage guarantee scheme, yet another attempt by the Conservatives to force a more politically convenient, demand-side solution on to what is ultimately a supply-side problem. While the recently announced planning reforms will certainly help to increase supply in towns and smaller cities, there is doubt as to whether they will adequately address the problem where it is most acute: in the UK’s major cities and, in particular, London.

There are two main concerns that policy makers must address: increasing the number of houses built per year to make up for the supply shortfall and countering the culture of nimbyism that is so hostile to new developments.

It’s no wonder that the UK has both one of the most centralised and bureaucratic planning systems in the world and one of the world’s worst housing crises; since the Town and Country Planning Act was first introduced in 1947 and widespread green belt designation was introduced in the 1950s, the availability of land for urban development has greatly dried up, with the state nationalising the use of land rights on private property.

No one is denying that valuable rural landscapes should be conserved, but the current system seems to extend far beyond its original intended reach. Research carried out by the London School of Economics shows that there was 721,500 hectares of land designated as part of the green belt in 1979, but by 2019 this figure had risen dramatically to 1,619,320 hectares. Plenty of this land consists of derelict sites in or near major cities that could be regenerated with new developments, but green belt designation enforces a near total ban on any construction, even if communities demand new housing.

There must be an urgent review of green belt designation alongside these new reforms if the sites on this land are to be opened up for development; without a readily available supply of land on which to build on there will never be a sufficient supply of new housing. Any new developments, however, will have to keep in mind the concerns of local communities around the quality of housing available, if the culture of nimbyism that so often holds back new housing is to ever be kept at bay.

Much of this fear of development can be traced back to the divergence of architectural design from public opinion, epitomised in the brutalist architecture that was so favoured by planners of the post-war era, the template of high-rise, low quality that became so prevalent across towns and cities in the UK to the detriment of their residents.

Even today, centralised planning laws mean that only a few major builders can really afford to take on the administrative and financial burden of property development, leading to the ‘identikit’ new builds that are often churned out by developers to the dismay of local residents.

The Strong Suburbs paper released by Policy Exchange last month provides a clear path for correcting this historical error, detailing how individual streets could work together and redevelop their properties on their own terms, delivering higher-density, higher-quality housing all while providing an often much-needed uplift to their neighbourhoods.

The government would be wise to follow the recommendations of this paper and empower the free market to deliver the homes that people want, allowing local communities and developers to decide on the style and character of new builds, rather than the state interfering and attempting to micromanage every project.

The real test now is whether there is enough political will in Westminster to go beyond the dribs and drabs approach to planning reform and make the necessary changes, else an entire generation could be denied the ability to own their own home and have a real stake in society.


Written by Samuel Prosser

Samuel Prosser

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