Yes, let\’s have a house building boom

A 1930s-style building boom could bring back growth

House building after the great depression revived the economy, tackled overcrowding and kept property prices stable for years


Great idea
.

Vince Cable, the business secretary, has been pressing cabinet colleagues to adopt the 1930s approach. He thinks house building is the way to get real demand into the economy quickly, and has championed the idea of government guarantees for housing associations. He said in a speech last year that there was a virtuous circle in the 1930s in which higher mortgage demand led to an increase in house building, which in turn led to lower prices and greater affordability, leading to still higher demand. \”Houses built by the private sector rocketed from around 130,000 in 1931 to almost 300,000 in 1934 and it is estimated that house building contributed almost a third of all employment increases in this period.\”

Super. Sadly, Larry Elliott completely fails to mention that a 1930s style housebuilding boom would be illegal these days. Suburban ribbon developments? The planning system wouldn\’t allow it. Large gardens? Can\’t have them now, got to put 14 dwellings per hectare.

And there\’s no way at all that the planning system will provide plots for 300,000 houses a year.

Which means, as various of us have been saying for years, that you need to reform the planning system first. Get it back to what it actually was in the 30s. Where the plot price was 5% or 10% of the total price of the house, not the current 50% to 70%.

Of course, having done that you\’d not need to do anything else, you\’d have already solved the problem.

12 comments on “Yes, let\’s have a house building boom

  1. Tim’s 50-70% might be a bit high. Far as I can see from this Policy Exchange work, the figure is nearer 30%:

    http://www.policyexchange.org.uk/images/publications/making%20housing%20affordable%20-%20aug%2010.pdf

    I did my own calculations which agreed with the latter work.

    But the important point here is that thanks to immigration we can no longer afford gardens, which proves what a boon immigration is. Though we could afford them if we just abandon all restrictions on development and destroy hundreds of square miles of countryside – again proving what boon immigraton is.

  2. And there is no chance planning reform while the NIMBY’s have clout….

    Having said that, the horror stories from people who live close to chavscum in social housing (e.g. the university lecturer who killed herself due to the crack den next door) means that I have a fair amount of sympathy for the NIMBY’s in this case…

  3. Perhaps it’s not planning that needs reforming as a priority – it’s the right of residence.

  4. Well, it is mentioned that it was the private sector who did the building, which would tend to reinforce Tim’s point.

    Not quite sure what immigration has to do with it, knowing hungarians who share a normal 3 bed house between 8 or 10 of them…Most of whom go back home after a few years. They would also teach a few homegrowns what working means.

    Or having visited houses where each room has been transformed in a room to let, sharing bathroom and kitchen. On the contrary, I would say they make good use of the space available…

  5. Monoi>

    Yes, we’ve explored the subject before and concluded that the impact of immigration on the housing supply has been negligible at most. It’s the tens of millions of Northerners who’ve moved South who’re the problem.

  6. Ralph, according to Wikipedia the land area of the United Kingdom is 94,060 sq miles, and according to the BBC, about 7% of this is already built on, so about 6,600 square miles (including roads).

    If 1000 more square miles of the UK is built on (an expansive definition of your “hundreds”, then UK urban areas will rise from 7% to about 8% of the country.

    The BBC article then states that about half of the urban areas are greenspace (parks, sport pitches) and another 18% is domestic gardens. Only about 2.27% is actually built-over, concretey/slate/bricked/asphalted stuff, apparently.

    Given these figures, adding some more hundreds of miles doesn’t seem like a bad idea.

    http://www.bbc.co.uk/news/uk-18623096

  7. The NIMBY attitude is incoherent. If you don’t want the post office to close, the school to be undersubscribed, the pub to go bust and the general store to be turned into a cold turkey farm you know what to do:
    Build a couple of acres of executive housing at the edge of the village.

  8. Hard to believe this was printed in the Guardian. Still, they are trapped between two imperatives – hatred of ‘NIMBYs’ because they are middle-class homeowners (i.e. “Daily Mail Readers”) and a horror of houses being built on the Hallowed Green Belt.

  9. There’s no way the cost of planning permission is 60-70% of a new build house. Or rather there’s no way the pure planning permission restriction is that much. All the extra non planning stuff adds most of the extra. I reckon the average house has £25-30K of pure planning restriction in it. The rest is building regs, development regulations, section 106 agreements, requirements to build schools, roads, drainage,, open spaces, sewers etc etc, plus the actual cost of the house of course.

    If you said ‘You can build wherever you like, but still have to abide by all the other restrictions’, houses wouldn’t come down much in price. So unless you are going to allow developers to build houses with no thought to drainage, sewers, utilities, roads, schools etc, houses are not going to halve in price.

  10. Monoi,

    “8 or 10” immigrants sharing a 3 bed house are not typical immigrants. The typical immigrant (first and second generation) earns much the same as natives, and thus presumably occupies a similar amount of floor space.

    Tracy W: The fact that covering a thousand square miles of countryside with housing and concrete represents a small proportion of the total land area of the UK has nothing to do with whether that small percentage makes us better or worse off. The murder of one person “only” reduces the population by a one sixty millionth, so it’s unimportant? False logic there, I think.

    Precious few people want the countryside near where they live built on: they regard any such development as degrading their quality of life. That’s an important factor that has to be subtracted from whatever the benefits of immigration are.

  11. Ralph, you forget the fact that most of us have no countryside near where we live, so the countryside near where you live being built on has no impact on us. You’re the 5%(?) and we the urban 95% (and the UKIPPERS who all live overseas) don’t care.

  12. @ Ralph, well, they are pretty typical in the east of London. I just could not quite believe it when helping a friend of a friend. And those are the immigrants one thinks of when talking immigration. I have lived in this country more than 25 years, and that was not “the” topic until a few years ago.

    I’m therefore even more unclear as to which immigration you speak of. Unless you mean that people like me should go home? Which would be a tad unfair as I contributed several 100’s of thousands of pounds in taxes over the years, if nothing else. Granted that I live in a large detached house with a big garden. Maybe I should rent out my shed? Or give over some of the floor space to natives? But then, so should my british neighbours?

    Surely, I should not let facts get in the way of good honest prejudice.

Leave a Reply

Name and email are required. Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>