The term ‘housing crisis’ has been in the political lexicon for a long while – it first entered Hansard, the record of speeches and debates in Parliament, in 1919. This gives us some sense of normality when we discuss it as a party and when we consider policy approaches to housing, even in the current crisis which is rooted in the 1980s.
Familiarity with the term ‘housing crisis’ is harmful to how we view the scale of the problem. Housing has been a ballooning problem for decades, arguably the label of a ‘crisis’ has been justified for much of this time. Though we are now reaching a cataclysmic level of housing stress which is severely damaging our living conditions, our economy and our politics. We all recognise the symptoms: a low growth, high-cost economy with stagnant real-terms wages and a perilous public purse.
For some time, Brits have endured some of the most cramped living conditions in Europe and North America. In England specifically, the average home is 71.9 square meters – Canadians typically live with double this space at 150 square meters. On mainland Europe homes are more modest but still considerably larger than the average English home – Italians see an average of 108 square meters. We can do better than this.
There’s an engine driving British homes ever smaller and it is one you will probably recognise from a leafleting round almost anywhere in the country. Properties which used to be a family home are now two or even three front doors or doorbells to the same building, often as flats or increasingly as HMOs. The rise of HMOs being a response to acute housing stress, often resisted by local authorities with a keen eye on the number of licenses they will grant.
As our homes grow smaller, we see ever more stories from the rental market about families sharing desperately inadequate rooms, often impossible to heat and sometimes caked with mould. Yet constricting the supply of HMOs or subdivided homes is to constrict the market even further for young people desperate for a place to call home, it limits even the short-term pressure valve on the simple problem that there are just not enough places to live.
As a young professional, HMOs are the only option for me. I live in a former family home with two other young men and still it consumes around 40% of my take-home pay. Saving is difficult, sometimes impossible. During the winter we were facing £300 electric bills and 8 Celsius indoors due to degrading windows the landlord would not fix – yet the flat was still legal to rent. The landlord even raised the rent by 25% after 18 months, and we had to leave. According to a report by the Centre for London, rent now makes up more than two fifths of Londoners’ earnings, and 25% of Londoners live in poverty after paying housing costs.
Compound this with the soaring cost of homes to buy or rent and quickly you will see that young people have no opportunity to buy, they are trapped paying landlords who are often of a generation who quite simply had more affordable property at our age. Meanwhile, many landlords argue that they cannot accept their investment costing money in the short term – they must accrue an asset and make more money while doing so.
Young people that are reading this will likely recognise this story. House prices are now 14 times the average income in London, and 8.3 times income across the UK – historically house prices are 3-4 times the average income in the UK. We have no fair chance to get a leg on this ladder.
Those over 40 are also likely to see the problem. It might be that you are helping a child to find their first (or second, or third) rental property and finding a deeply competitive market where tenants will bid over the asking rent just to secure a home. Foxtons this April shared statistics showing that 97,000 tenants were chasing just 2,000 properties – the rental market is broken, and undersupply has broken it. The same applies for house prices, if there is not the demand to support high prices, they will fall, and if there is adequate supply prices cannot rise as quickly as they have been.
Studies show that England is missing 4,000,000 homes, having not met demand for decades. Some of these will come from the unjust subdivision of existing homes, but we must nevertheless aim to meet this demand. Research into the ‘moving chains’ that new homes unlock demonstrates that lower income housing is freed up by new homes in high-demand areas, and thus new homes quickly impact affordability. We have clear evidence that the problem is a lack of homes, and that new homes quickly help those who need it most.
Constrained housing supply comes almost entirely from our planning system, which has morphed itself into becoming a system for constraining development of almost any form. The language of that transformation is all around us – ‘green belt’, ‘strategic gap’, or ‘rural character’ for example – terms all used for development immediately surrounding our most productive and expensive cities, even near fast and high-capacity public transport.
Recently, a top-5 developer told the Times “we want to ensure that, by not over-delivering on build, we’re not having to discount”. On the other side, a minority of residents often tell political leaders that they will not accept new housing in their community, whether it’s near a mainline station into a major city or if it’s in the major city itself.
Under the current arrangements with only an advisory national target, developers cannot build enough, let alone “over-deliver” and a vocal minority can practically exercise a veto on growth in their area. This is unsustainable.
The housing crisis demands leadership. We are well-placed to call out lacklustre performance from the government on housebuilding. We must not lose our nerve. Housebuilding is an economic engine and a safe, secure home is key to opportunity – we have a moral duty to solve housing poverty. To do that, we must start by building enough.
* Charlie Murphy is a former Vice Chair of Young Liberals.
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17 Comments
Some of those missing homes are second (or more) homes, others are just holiday lets. They could be brought into permanent occupation instead of being wasted. Because of the destruction of homes during WW2, empty houses were requisitioned for use by the displaced, so there is a precedent.
‘There’s an engine driving British homes ever smaller…’ New-build homes are also relevant here. When I was house-hunting ten years ago, I found the new-builds cramped compared to older equivalents (despite being a lot more expensive).
But constrained supply isn’t just the fault of planning laws. Developers are only interested in building ‘executive homes’, for the maximum profit, in places they see as viable. It’s not in their interest to have a large supply of housing at lower prices. And now, rising interest rates/lower house prices will also stop them building.
Developers are only interested in making money. What sort of homes they build is down to a combination of demand and government distortions of the market. Builders of executive homes in small developments face relatively few restrictions and upsizers have the money to buy. Putting fifty flats on the same land would require years of negotiation on planning gain and proportion of “affordable housing” and most of the people who want to live there can’t afford to. That said, if developers get a chance to build flats here in Greater London they jump at it.
@Cassie. Spot on. Also the drive to demand that they supply some ‘green space’ etc has been met by reducing both the footprint of the homes and their gardens..
>” Constrained housing supply comes almost entirely from our planning system,”
No.
Our housing “crisis” is just a symptom of a much deeper malaise – too many people, due in-part to a daft belief in never ending economic growth as measured by GDP; and the way to achieve this is to bulk import people; the housing crisis is just one indicator of the folly of this mindset.
The problem is, we don’t have 25 years in which to build the houses deemed necessary to resolve the current shortage, as ONS forecasts indicate an ever increasing population and thus demand problem. However, this totally ignores the perfect storm; which if we are to survive requires dramatic actions to be taken in the coming decade, in part because we did very little in the last 25+ years.
So we need to start thinking about solutions that don’t require building more houses than our existing systems can reasonably supply given we will be massively reducing carbon emissions and thus the production of bricks etc. will need to be reduced and overhauled.
Bricks are really not the problem. The mortar between them is. It should not be that difficult for a machine to lay bigger bricks with thinner layers or mortar. Concrete of course is the worst option.
It is nor surprising that England, with one of the highest population densities in Europe, also has smaller homes on average.
In the context of all this, it is insanity for the housing policy paper (F31 at Autumn Conference) to seek to scrap the national house-building target. If passed, it would send completely the wrong message to young people – and as a 35 year-old, I’m not sure I even count as “young” any more. We are rapidly reaching the stage where this will affect most of the population, if we aren’t there already.
@Peter Davies
Re comment at 1st Sep ’23 – 1:54pm
Perhaps we could be building many more prefabricated houses – better insulated.
The important question is how many are coming over via the migrants.
I and many other’s who are disabled can’t get homes. I have to wait for another month for a doctors appointment. My sight is playing up. Been blind once before.
Our veterans who are disabled in the same position. Fighting for our freedom they are dumped. 30 years for many families on the waiting list.
I’ve taken OVO to the Ombudsman. I’ve been receiving estimated bills since last October. My meter was read.
We could go on and on.
Totally agree it’s a crisis but, as Roland says, it’s not “almost entirely from our planning system”. Planners are civil servants trying to navigate conflicting demands under political direction. Some decisions will always be controversial.
Separately, the big developers are an oligopoly, dominating the market far more than large builders on the continent. That leads to higher prices and lower quality with horror stories regularly appearing in the national press. What do LibDems have to say about this?
A more important cause of the housing crisis is undoubtedly immigration, where, as Roland says, there is a daft belief in some quarters that importing people in bulk is somehow beneficial.
In just the last 20 years population has grown by 8.1 million, coincidentally nearly the population of London (8.8 million). This is, of course, wildly unsustainable.
https://www.macrotrends.net/countries/GBR/united-kingdom/population-growth-rate
Since London is the preferred destination, it follows that the housing crisis will be worst there. If average family size is two, then that almost exactly explains the 4 million house shortage noted in the article (although it’s not as simple as that – e.g., household size has been decreasing and that too drives demand).
Apart from its impact on house prices, mass migration depresses wages, especially at the lower-skilled/gig economy end of the spectrum, making housing less affordable to many.
As a policy package, that might perhaps appeal to the most cynical and self-serving Tories, but it beats me why LibDems would support it.
The economist published an essay on the achievements of Liberalism over the past 175 years Reinventing liberalism for the 21st century
“In Paris, Hong Kong, New York and London the median household spends on average 41% of its income on rent, as opposed to 28% 30 years ago.
This is a huge windfall gain for a relatively small number of property owners. It reduces the chances of prosperity for a much larger number who are prevented from moving to high-productivity cities offering better wages.
The best solution to this is not new: it was well known, and pursued by liberals, in the 19th century. Tax landowners according to the underlying market value of the land that they own. Such a tax would capture for society part of the windfall that accrues to a landowner when his local area thrives. Land taxes capable of replacing all existing property taxes (which are raised on the value of what sits on the land, rather than just the land itself) and then some would greatly sharpen the incentive to develop. Because the amount of land is fixed, a land tax, unlike most other taxes, does not distort supply. At the same time, ease planning restrictions. It is no good raising the incentive to develop if regulation then stands in the way. But development rights have been so far collectivised in many cities as to come close to undermining the very notion of property. If the windfall gains from soaring property values are heavily taxed, NIMBYism will not be such a profitable strategy.”
I see that the return to Albania carries on.
Of course, free 4 star hotels stays is a big draw. Those working are losing homes and many job loses in the hotel industry.
Our country is a sad place to exist in. I would move to France if I could afford to buy the very reasonably priced homes.
Putting the blame on France is not the way forward. Revolving the issues are, with all concerned throughout Europe.
In Bath a hotel has now been taken over. How this will end is a large concern.
I have opened up a complaint with Bath City Council on the lack of housing for accessible needs.
Fairly recently, I did try to raise a meeting on the subject.
The Housing Ombudsman says it should be top of the agenda.
The army veterans have found it difficult to get housed even with amputation and mental health issues.
I am concerned at the anti immigrant thread running through the comments. Immigrant bashing won’t solve the housing crisis. Here are some positive suggestions as to what will.
1. A massive programs of social housing building led by local councils. Councils like LibDem Eastleigh are already showing the way. Subsidise this if necessary.
2. Bring into use as housing vacant office buildings as a result of more home working in city centres.
3. Bring into use flats above shops, many of which are empty.
4. Requisition empty property of which there is far too much.
5. Investigate the restrictive practices in the building trade, especially amongst the large house builders with a view to creating competition and ending oligopoly/monopoly. If necessary split up large companies.
None pot this requires new build on greenbelt sites
What is lacking is the political will to solve this crisis. This government is in hoc to large building companies, Labour hasn’t the will nor the courage to stand up to the developers.
Sufficient affordable homes is a necessity. Rather than focus on helping people to own their own for its investment potential, we shoud concentrate on making the rented sector work better for everyone. More regulation is needed to protect both landlord and tenant. There is no reason why in a decade or so renting could be more popular than purchasing with the right incentives.
I believe in green open spaces, the ability for farming.
I know those agreeing with higher immigration will take immigrants instantly into their homes and pay private health care costs if needed.