This is an immense failing of all shades of government. In the London area a family home that costs around £100,000 to build now sells for a million pounds and costs £36,000 a year to rent. This makes it impossible for the vast majority of incomers to live and work in London, creating an immense commuting infrastructure and holding back the whole British economy. This stupidity extends nationwide, so that the taxpayer has to intervene to pay the housing costs of millions of households. It is the second biggest cost for the taxpayer, totalling £23.8billion in 2013-14 – almost 30% of the entire welfare bill. All utterly ridiculous.
What has gone wrong here is very simple. The law of supply and demand puts prices up when there is insufficient supply. And Great Britain does not have enough houses. In the 1950s, with Harold Macmillan as housing minister, the UK built around 300,000 new homes every year. This increased to 425,000 new homes a year by 1968. Last year 122,590 homes were started, the biggest number since 2007, and up 23% year on year. So we are building a tiny fraction of what the country needs.
What has gone wrong? Basically the real shortage is of building land that make it incredibly difficult, vastly time consuming and immensely expensive to build. Yet the UK has huge amounts of spare land. Power up Google Earth and fly round Great Britain a bit and you will find that, amazingly, very little land is used for housing to accommodate the human beings who live and work here. The best measure is from the UK National Ecosystem Assessment (UK NEA), they calculated that 6.8% of the UK’s land area is now classified as urban, 10.6% in England, 1.9% in Scotland, 3.6% in N. Ireland and 4.1% in Wales. But in England 78.6% of this urban area is designated as natural rather than built so the percentage of England’s landscape which is actually given over to homes is a ridiculously small 2.27%.
So how did we get into this ridiculous situation? The answer is the highly restrictive 1947 Town and Country Planning Act and conservation fascists like the Council to Protect Rural England (CPRE) who really are the enemy of everyone in Britain wanting a home. We could double or triple the amount of land given over to homes in this country and it would still be a green and pleasant land.
And what is the answer?:
- Repeal the 1947 and 1990 Town and Country Planning Acts.
- Target a minimum of half a million new homes per annum.
- Force all planning authorities to issue new planning permissions every year equal to, say, 10% of their existing housing stock. Fine them millions if they fall short.
- Maximum period for planning permission (just a rubber stamp) should be two weeks.
- Protect all National Parks, Areas of Outstanding Natural Beauty and National Trust land with the existing system.
- Get rid of greenbelts and encourage home building on farm land.
- Build a string of Eco cities between Cambridge and Oxford, linked by a new motorway and train line.
- Scrap Section 106 and all other stupid, onerous and restrictive planning constraints. Let the market work.
The last, Labour, government are mostly to blame for destroying house building in the UK. The current Government has had the immense problem of inheriting Gordon Brown’s vast economic recession. Yet their answer to the housing market, Help to Buy, it utterly the wrong solution. It uses taxpayer’s money once again when there is no need and it increases demand without increasing supply which merely increases house prices. What is needed are the radical reforms listed above that will massively increase the supply of homes. It really is the only solution.