Housing Crisis: What Housing Crisis? (Part 1)

The Spring Budget published in March 2023 represents another missed opportunity for housing and the positive impact it could have on our lives and our economy. As we progress towards the local elections in May 2023, it poses an interesting question: When will we reach the tipping point in public opinion on housing, whereby demands for increased housing supply come to the fore?

In a four-part series, Jonathan Headland, an urban design director at WWA Studio, explores the state of housing and public opinion.

Supply, Demand, and Constant Policy Changes

How do we fix the housing crisis, when the opponents to development don’t accept it even exists?

Upon reading any number of recent publications on the matter of housing supply in this country, you’d be forgiven for believing the issues of sustained chronic under-supply were well understood. The Centre for Policy Studies’ (CPS) recent The Case for Housebuilding summarises the considerations well and the detail paints a stark picture:

Jonathan Headland
  • In the 1960s Britain built 3.6 million homes, while in the 2000s and 2010s, we built around 1.5 million homes a decade. On a net gain basis in England, we have halved the increase in the overall stock of dwellings from about 1.8% per year in the 1960s to around 0.7% today. This has gone hand in hand with a major increase in population since the early 1990s, an increase in households through divorce, extended families and the growth in an elderly population. We are still adding far fewer homes for a given increase in population.
  • Since the 1970’s house prices have increased dramatically. In addition, prices have risen fastest where supply and demand are most imbalanced. In countries that built more, price rises have been far lower.
  • Rents are also climbing as a share of income. Whereas private renters spent 10% of their income on housing from the 1960s to the 1980s, rising to 15% in London, the share of income spent on rent has risen to 30% in recent years and almost 40% in London.
  • Home ownership is on a sustained downward trend, despite lengthy demand-side stimulus from the government in the shape of Right to Buy and then Help to Buy, the UK sits 4th from the bottom in a league table of European home ownership.

In the context of the above assessment from a right-of-centre CPS, whose findings have been publicly endorsed by former Housing Secretaries Sajid Javid and Simon Clarke and by former Housing Ministers Brandon Lewis and Kit Malthouse, what is being done to improve this situation?

The Government has recently concluded the consultation on changes to the National Planning Policy Framework (NPPF) as well as wider policy reform through the Levelling up and Regeneration Bill (LURB). In what has become an increasingly chaotic backdrop to development in this country in the last few years, it feels the more time passes since the initial planning White Paper of 2020, the less helpful the government intervention in the system becomes. LURB for example, and in particular the Villiers amendments to LURB have shown what the real fundamental issues are in terms of housing supply…….NIMBYS. These polarising views which fail to realise a joined-up big picture for our country are directly informing the current shift in national policy on housing, as we move into a policy dynamic which feels like nothing more than electioneering.

With the industry-wide outcry relating to the NPPF revisions still ringing in our ears, it is clear there has never been a bigger disconnect between government rhetoric, proposed policy to address it and the wider public’s appetite for ‘growth.’

Click the links to read the second and third parts of this series  – Housing Crisis Part 2: For every home purchased an additional opinion (NIMBY), and Housing Crisis Part 3: Where do we go from here? A popularist planning agenda. 

Image Credit: Aerial – Somerset: Image by wirestocka on Freepik