Author Archives: Alex Church

Our current government relishes declaring some aspect of the UK’s performance is “world beating”. However, when it comes to housing policy, we are mostly superlative in all the wrong ways.

Between 1970 and 2019, the UK saw the largest increase in the real price of housing of any OECD country. London is perhaps the second most expensive city in the world. “A Review of European Planning Systems” notes that “The UK stands out as a country with very high real rates of growth of house prices and low rates of housebuilding” and infers a link with our usually unpredictable and restrictive planning system.

Not everyone sees it this way. James Jamieson, the chair of the Local Government Association recently told the BBC it was “a myth” that the planning system inhibited homebuilding. He noted that 90% of planning applications are approved and that in the last decade planning permission has been given for over a million homes which never got built. 

However, there are good reasons to be sceptical of Cllr Jamieson’s scepticism. Focusing on applications approved or rejected ignores the applications that never get made. Why bother applying to build homes on land that the planning system has already allocated for a non-residential purpose or included in a greenbelt?

Plus, homes being granted planning permission then not being built is not a vindication of our planning system but an illustration of its faults. As Anthony Breach of the Centre for Cities observes: precisely because obtaining planning permission is so costly, difficult and unpredictable, developers have an incentive “to apply for more planning permissions than they can actually use.” This gives them “a safety buffer which they can dip into if one of their applications for planning permission goes pear-shaped” and thereby reduce the risk of their equipment and workforce sitting idle.

This supposition is supported by the finding of a 2014 research paper entitled “the impact of supply constraints on house prices in England” that areas with more restrictive planning policies saw house prices increase faster and new homes get built slower. This result should reassure anyone worried that extra housebuilding will not affect house prices: it can and it does.