How to fix the housing crisis? Put spades in the ground and build more homes
5 min read
As Members of Parliament, our time and attention is constantly sought across a wide range of problems – from laws that affect the whole country, to a highly specific personal case where we can use our position to improve the lives of our constituents, to whom we answer.
But the single biggest issue nationally and locally is, surely, our housing crisis. Recent polling in England shows more than three in four people believe there is a national housing crisis, and more than half think there is one in their area.
This is why I have joined the pro-housing campaign group PricedOut as a parliamentary champion, helping them to raise the issue and promote policy solutions to my colleagues in the House. Their aims – and my own – are quite simple: to end the soaring house prices which cause British people to be priced out of owning their own home, by getting spades in the ground and building the homes we desperately need.
There could not be a more important time for MPs to support pro-housing campaigns. By April 2023, average house prices had gone up by 80 per cent since PricedOut was founded in 2006. In comparison, annual incomes have risen by only 2.9 per cent. Consequently, Brits are forking out an ever-increasing proportion of their income on rent and mortgage payments. Londoners, for instance, spend more than a third of their average pay on rent.
This is ‘resource misallocation’ – when individuals make spending decisions skewed towards less productive efforts, usually because they are operating in a distorted market. In the case of our housing market it means that, rather than saving their money, using it to invest in the stock market or directly in growing businesses, or spending it on everyday goods and services, the incomes of British workers are being eaten away by extortionate rent or mortgage costs.
And the larger opportunity costs are huge. A highly skilled worker may be unable to relocate to one of the UK’s most productive cities, in turn impacting businesses unable to fill job vacancies. A couple may decide against having another child because they can’t move to a suitably sized property, with long-term consequences for our ageing population.
The economic impacts of this have been laid bare for all to see in a report published in February by the Adam Smith Institute (ASI). The think tank’s first-of-its-kind model in the UK found that planning restrictions on building up and out have been costing the British economy as much as 6.1 per cent of potential GDP a year; that’s almost £140bn.
As this report highlights, permitting greater densification is one of the best policy levers we have to pull. Building upwards means that accompanying infrastructure costs will be lower; money can be spent instead on improving existing local schools, hospitals and roads for the benefit of existing residents and incomers. Densification can bring economic windfalls for the high street too, as the new developments surrounding the now-bustling Battersea Power Station have shown.
As I find myself saying frequently, there are no magic bullets in politics. Relaxing planning laws for building up and out will be just one of the measures we need to take. Building on both green belt and brownfield land, and reforms to the way we ensure local infrastructure can cope with new residents, will all be required.
I will continue to demonstrate to my fellow MPs and policymakers that, contrary to some views, building new homes is actually popular.
To be frank, I have been frustrated with my own party’s attitude to housebuilding for some time
Recent polling for the ASI found that people had real concerns about the lack of affordable homes in their area, the inability of our young people to get on the housing ladder, and the consequences that the lack of homes is having on homelessness rates.
The think tank’s survey of the general public in England found more than half of respondents supported building new houses in their area. Even building on the green belt received net support, if a proportion of the profits from the development were given back to the local community.
Politicians of all stripes are responsible for the housing crisis. To be frank, I have been frustrated with my own party’s attitude to housebuilding for some time. According to the think tank Centre for Cities, we now have a shortfall of more than 4m homes. Every year that we miss our housebuilding targets, we exacerbate it further.
We are running out of parliamentary time – but there is much we can still do with existing legislation. One such measure would be to release all green belt land for development within 10 minutes’ walk of a railway station. This would free up nearly 20,000 hectares (49,400 acres), even when sites which have real environmental value are protected.
Looking ahead, it is imperative that we give the British people, especially the younger generations from whom we risk haemorrhaging support, a tangible reason to vote Conservative. We need to give them a compelling offer on housing in our next manifesto; one that includes substantial planning reform.
There is time yet for us to demonstrate to the public that we are still the party of homeownership. I would urge all my colleagues to join me in supporting the vital work of pro-housing organisations such as PricedOut and the ASI.
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