A developer, as the old joke goes, is just an estate agent without the sense of humour. And who can blame them for being miserable? The residential housing crisis lurches from tragedy to farce to disaster, and back. Meanwhile, no one’s making any more land, leaving millions of renters and stay-with-parenters light years away from their own roof over their heads.
Successive Tory administrations have nibbled at the edges of the problem, trying to increase the supply by reforming the Byzantine planning procedures. However, each housing minister has come back with their proverbial between their legs, beaten to a pulp by Nimbyist Tory backbenchers.
Burgeoning Population
Whilst everyone likes the cosy, utopian, fully-upholstered idea of ‘homes for everyone’, a burgeoning population cannot live in three-bedroomed semis in the sky. Saying that, if you’ve sweated your wherewithals off all your life and mortgaged your soul, future and offspring for the privilege of home ownership, it’s understandable that residents don’t want unimaginative, Lego-style blocks possibly containing undesirables, in their back garden.
Remember Michael ‘The Snake’ Gove, who was almost as pointless as his ridiculous title (‘Levelling-Up MInister’). He was meant to have taken a machete to unravel the Gordian Knot of the planning system, but alas, even he was defeated.
In the 1970s and ’80s, the UK managed to build 300,000 new homes per annum. Currently, despite the best efforts of the government and all of its agencies, we’re churning out a paltry 200,000. The UK population stood at 67 million in 2020/21 (and rose by eight million or so over the previous 20 years – about seven million of this directly or indirectly linked to immigration, which shows no sign of stopping). The supermarkets estimate they’re feeding 80 million inhabitants (or maybe that’s just Boris Johnson’s weekly consumption).
Squished Together
What’s more, we’re already squished up together. The current population density of England is 429 people per square kilometer (ONS, 2020/21), ahead of the Netherlands which has 423/km2. This makes England the most densely-populated nation in Europe. It is 3.5 times as crowded as France (116/km2) and just under twice as crowded as Germany (232/km2). Our Dear Rulers stubbornly refuse to deal with this thorny issue, which also impacts the housing crisis.
Then there’s the locals. No sooner than you raise the subject of a controversial development project, the extended pitch forks are brought out by the vehement opposition groups. These are comprised of environmentalists, conservationists, ecologists, archaeologists, and any other vociferous pressure group who can mount an effective opposition.
Swamp of Bureaucracy
The planning system is so infested with petty local politics that the objectivity of a coherent development policy soon becomes mired in a swamp of bureaucracy, with all its deleterious effects on the supply of new homes built in the UK.
Recently, the Prime Minister has dropped the compulsory house-building targets to see off an embarrassing backbench rebellion, prompting criticism that he’s putting party unity ahead of the need to house everyone.
Rishi’s gymnastic trick is that the target will be ‘advisory’ and not ‘mandatory’. Councils will be allowed to build fewer homes if they can demonstrate that building more housing will change the character of the area. In other words, they can ignore it as they see fit, especially if they’re already under pressure to meet targets.
At least someone in government has the good sense to lean on house builders and attack their noxious practise of ‘land banking’. However, without complete demolition of the whole system, it’ll just become more congested.
The BoE – for once – were wise to increase the base rate by only a quarter percent since they have to be seen to be making a valiant attempt to bear down on inflation. Once again, this leaves first-time buyers having to live on beans and toast for decades while they scrape together a deposit.
They could flock to Skipton Building Society, who at least have the imagination to re-offer 100% mortgages. Forgive the cynicism here, but I wonder how many ‘low-information bozos’ will qualify for this offer and how much money will be allocated for this high-risk lending category.
One unintended consequence
Prime Minister Rishi is desperately trying to administer a last-minute cortisone shot to the Help-to-Buy regime. Although it’s been an effective catalyst to demand, it actually ran aground a few years ago when the piggy bank was depleted. And there’s the rub. If you stimulate demand for a finite supply, prices will go up. This further disenfranchises the vulnerable first-time buyers, who are already light-years away from the bottom rung of the residential property ladder.
These poor souls are already struggling with the rental market where rent inflation is approximately 5% per annum as a direct result of the rapidly disappearing specie of private landlords, who are turning to selling rather than renting, thereby reducing the supply. Renters enter a horrible and permanent loop of struggle and impoverishment, sometimes only a hair’s-breadth away from camping out in a shop doorway, Heaven forbid.
One unintended consequence of the Help-to-Buy regime was that developers saw what was coming and were frothing at the mouth with excitement. They managed to hornswaggle both the government and naïve buyers (quite an achievement) by palming off some of their shoddy new homes at full asking prices. This was not part of the plan and some developers made profits that were greater than the GDP of a small country.
Meanwhile, the next Election breathes heavily down the government’s neck. Help-To-Buy (which is really ‘Help-To-Bankrupt’) is a quick-fix, Botox-shot way to cover up the housing sector deficit. It’ll grab a few votes from the gullible and economically illiterate, but only serves to exacerbate the problem further down the track.
Government Needs To Use A Chainsaw
Until the government takes a chainsaw to these issues they will never be resolved. This is a country of great innovation and ability, yet we can’t – or won’t – find a way to satisfy the insatiable demand for new homes.
It doesn’t help that our freshly-oiled King Charles is a hardcore greenie and will protect the landscape of the UK as much as he can. This is despite the Crown Estate (net income for 2022 a mere £312.7 million) gobbling up land which once gave the public access to bridleways and footpaths. It looks doubtful that our new ‘inclusive, diverse, slimmed-down Monarchy’ will rent a few spare rooms in Buckingham Shed for cash-strapped Londoners. Ultimately, people need homes and we have to address this problem once and for all.