The Building Better, Building Beautiful Commission does wonderful work, but it’s not translating to the ground. By-and-large developers are not “creating streets”, they are sticking up blocks inspired by the screw you school of architecture. Still, let’s not be naive. We could build Rivendell and half the nimbies still wouldn’t be satisfied. So perhaps the Tories should defy them instead. With a majority of 80, they could afford to lose some seats down South, especially if there are more to be gained up North.
But the trouble is, the reforms would do nothing to make housing any more affordable. The only way that houses get cheaper is if supply rises relative to demand. It therefore matters who controls the supply and demand.
On the supply side, it’s not just the planners, but the big developers. After all, they’re the ones who sell new houses into housing market. Unfortunately, they’ve got no reason to increase supply to the point at which house prices stabilise or fall — and so, obviously, they won’t. As for demand, that isn’t just controlled by aspiring home owners, but also by property speculators — which these days don’t just include the amateur buy-to-let market but major private equity firms. These people also have no interest in letting house prices fall.
So, bugger the nimbies. They may have a big influence on the politics, but they don’t control the economics. Planning reform, therefore, is largely irrelevant. A very different plan of action is required.
Firstly, the law should be used to exclude speculators from the housing market. We plan the location of new housing for environmental reasons and we should plan the ownership of new housing for social reasons. Most new houses should be reserved for first-time buyers and movers.
Free marketers might complain that this is distributism not capitalism. But so what? For a conservative, spreading home ownership should come before the purity of the market place.
On the supply side, government needs to break the big developers’ stranglehold on the land supply. It can do this by purchasing and preparing sites itself. A time-limited right to fully develop and sell-on plots could then be auctioned-off. Builders would thus be able to obtain the sites they need for houses they actually intend to build, but they’d have no need — nor the perverse incentive — to hold on to more land than that.
This still leaves the political problem. Lose enough seats and your policies won’t matter because you won’t be in government. The answer is to concentrate new housing in as few, very carefully selected, locations as possible.
There’s no reason why mini-cities like Cambridge and Oxford shouldn’t become bigger cities. At the moment they’re surrounded by absurdly restrictive green belts. Stopping sprawl is a good thing, but these university towns are the size of a single London borough. Using the gentle density model of the Georgian square or the Edwardian mansion block, we can have expansion without sprawl. And what about Canterbury? It’s ridiculous that Kent, with a population of 1.5 million people, doesn’t have a single proper city. Elsewhere in Europe, a building like Canterbury Cathedral would take pride of place in a major regional centre.
Also let’s not forget that these are open-minded, Remain-voting, university towns. I’m sure that a progressive community that supports liberal immigration policies could have no objection to providing homes for a growing population. But if, for some strange reason, they do, then central government should insist. It is said that you can’t please all of the people all of the time. But if you seriously displease just a select few of them, then you’ll probably get away with it.
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SubscribeThis is exactly how North Sea licensing works. Oil companies bid for the right to explore specific acreage, and after a period of time, the license lapses. In that time you’ve either explored it or you haven’t but if you haven’t it’s re-auctioned.
It works there; with a few tweaks it ought to work elsewhere.
I do like the idea of building in constituencies that voted for mass immigration.
This would be great if it didn’t take so long to get permissions.
Back when I had a downtown office, I often spoke with my landlord, a local commercial office property developer. He explained that he had started applying for permission on his current development (in an already non-residential zone, but needed further re-zoning for some reason) twenty years before.
The council committee would discuss it for a while, reach no conclusion, or halt because of some objection, then take a recess and re-convene in six months or even longer in some cases.
Plenty of good ideas in here, but the most obvious is simply restricting private equity’s involvement in houses. New Zealand has an excellent policy restricting purchases of homes by foreign nationals, I imagine if we brought something in here London house prices would drop by a 1/3 (which is probably why they will never bring it in….)
Yet house prices rises in NZ are worse than in the UK!
Politicians need to learn to count. House prices have risen roughly 1000 (yes a thousand) per cent in the last thirty years- while the population has only increase 20%. So some of the price increase is shortage- lets be generous and say 100% – the other 900% is due to increased demand (lending) of cheap money shoving up asset prices. They cannot build to lower prices much. If you want lower house prices restrict house lending to the three times one income as it used to be.
Juenricks proposal seems to be a blatant handout for his developer donors- and will not reduce house prices one penny. But it will destroy millions of acres of countryside.
A rule like this on mortgages would primarily disadvantage the banks. Good.
However, I don’t agree that we can simply isolate the effect of ‘only’ increasing the population by 20%.
I have lived through a number of property booms and.crashes. . During each boom we are told there is a shortage of houses/ land. During each depression, these problems mysteriously vanish. Since 2008 and the cheap money boom, prices have risen to an average 12 times the average salary , whereas the norm historically was 3.5 to 4 times the average salary. Thus the’real’ cost of the average house inUK today would be under £100 000.. If interest rates were to rise to a more modest 4 to 5% prices would crash, slowly becoming more,affordable, as happened between 1987 and 1997. Only today it would be ten times more painful. The obsession with increasing supply is economically wrong headed. Single house occupancy is increasing.
To those who say that increasing interest rates or restricting lending to three times one income would result in negative equity- the answer is not necessarily. The lenders have caused the price increases- so if house values fall let the mortgage debt be reduced in step. The lenders gained from the increase let them share the downside.
“Free marketers might complain that this is distributism not capitalism. But so what? For a conservative, spreading home ownership should come before the purity of the market place.”
Speaking as a free-marketer, I don’t have the chutzpah to start complaining about the massively rigged, sclerotic and over-regulated market that is UK property at the point when further regulation is used to try to fix the problem.
I would, of course, prefer a free market solution instead, but that simply isn’t possible as long as supply is radically constrained the way it presently is. I may vote Tory, but my stake in this game isn’t to keep the Tories in power, it’s to make sure free market capitalism itself isn’t destroyed for want of simply allowing the younger generations to actually have a stake in the game.
Oddly no mention here of Steve Baker’s recent suggestion that NIMBYs be financially compensated for what is often a severe financial loss from a neighbouring new development. People will always fight to protect a vital financial interest and time is the enemy when new houses are needed NOW not after endless appeals.