As I\’ve been saying for some time now

As Alex Morton has argued in Cities for Growth, a paper for the think tank Policy Exchange – the problem with the UK housing market is not, as many policymakers seem to imagine, a lack of credit, but a lack of supply. Nor is there any absence of land on which to build. The constraint instead lies with lack of land with planning permission in the areas of the country where people want to live .

I’m not arguing for a Texan-style free-for-all. This would be inappropriate for such a densely populated island. But it seems bizarre that a country that so unashamedly celebrates consumerism in all its various guises, should deny its citizens, by virtue of an outdated, Soviet-style planning system, the one thing that would make a significant difference to quality of life – a ready supply of spacious, affordable housing.

Except, well, what is wrong with a Texan style free for all?

8 comments on “As I\’ve been saying for some time now

  1. “… lack of supply ….”

    How many homes have been built in the last 15 years? I’d put it somewhere near 2 million going by Figure 2 on that page.

    I struggle to see a lack of supply meself. In the last 15 years the small town where I live has added hundreds of houses and towns elsewhere have done likewise. What I do see is acre after acre of flimsy rabbit hutches with virtually no gardens at laughably high prices.

    Want to make housing more affordable? Let the recession do its job of shaking the bad investments out of the economy.

    From the article: “What counts for new house building in Britain is a miserable replica, in terms of quantity, size and quality, of what happens in a number of other advanced economies. Despite strongly rising house prices, Britain has significantly lagged other, equally densely populated countries, such as Germany, in terms of the number, size and quality of the houses it builds.”

    Dwelling density targets. Thank you John Prescott.

    If ‘something’ must be done what should it be? Loosening the regulatory burden somehow in order to assist the corporate builders to restart building tiny homes does not strike me as a bright idea. Make it easier for people to commission their own homes perhaps? Far less regulation for homes that are off-grid? Those would allow for a variety of outcomes and support small builders.

  2. “what is wrong with a Texan style free for all?”

    ‘Texan style’ is an oxymoron?

    There’s no problem with a free-for-all as long as appropriate taxes are in place to correctly price the external costs.

    Gareth>

    “I struggle to see a lack of supply meself. In the last 15 years the small town where I live has added hundreds of houses and towns elsewhere have done likewise. What I do see is acre after acre of flimsy rabbit hutches with virtually no gardens at laughably high prices.”

    That’s a result of the lack of supply. The land available to build houses is very limited, so large numbers are crammed in and yet people still pay large amounts for them. Often the quality is poor, but the price is still high because the valuable part of the house is the planning permission.

  3. What the hell is ‘a Texan-style free-for-all’? What about the history of development in Texas justifies the term? Does the phrase have any actual intellectual content or is it just a throw-away cheap shot?

  4. Dave said: “That’s a result of the lack of supply. The land available to build houses is very limited, so large numbers are crammed in and yet people still pay large amounts for them. Often the quality is poor, but the price is still high because the valuable part of the house is the planning permission.”

    Houses were crammed in because of a minimum density requirement of 30 dwellings per hectare with a tendency towards the 50 mark. This was due to the view of the government being that lower density developments were not sustainable and higher densities would increase the use of shared local services, reduce reliance on cars and help support local shops and businesses.

    Would the land be so valuable if the government hadn’t required that minimum density?

  5. Texas is very non-free-for all. They say ‘One (Texas) Ranger, One Riot’. Not v libertarian, methinks?

  6. Dave’s point is surely the correct one here. A free for all, Texan or not, would be fine if we had a decent land value tax and other externalities priced correctly. But as the first will never happen and the second is impossible, controls are likely to always be with us.

    This doesn’t mean, of course, that they can’t be too strict or too weak.

  7. Erm, Germany is as crowded as Britain? I don’t think so. It does not have anything like so high a population per square inch as Britain. The Netherlands is more like it. Or Japan. And in both of those property in desirable areas is expensive for the simple reason that more people want to live in those areas than available land can accommodate. I agree the planning system is ridiculous, but London house prices are high mainly because too many people want to live in London.

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