We must make it easier to build homes in London
Published in the London Evening Standard (January 4th, 2013)
There are plans for a handful of new houses in my neck of north London. It is a modest development, but the massed ranks of middle-class protesters are up in arms. There are protest meetings, passionate speeches, battle plans being drawn up, barristers drafted into action.
Such inevitable events are familiar to communities all over the country. Our homes are our castles, after all, and the citizen’s defence of their housing is hardwired into an adversarial planning system. New properties are seen as a threat, developers as villains, councils as their partners in crime.
Yet the country is sleepwalking with increasing speed into a housing nightmare. A chronic scarcity of homes is dashing the hopes of young people, dislocating family life and diminishing economic recovery. It impacts on almost everything from the cost of living — one study found the net cost of planning constraint to be 4p in every pound of income — to the environment and transport.
A slew of statistics underscores the insanity of our housing and planning policies. Britain is building fewer homes than during any peacetime for close to a century; it is generally assumed one-third of the number needed, but one government expert put the figure at one-sixth. In London, where the population rises by about 100,000 a year, fewer than 18,000 new homes were completed in 2011.
Nationwide reported yesterday that house prices rose last year in the capital, even under the dark clouds of economic gloom. This exposes the most basic economic law: soaring demand and crushing lack of supply. Prices are back above their pre-crisis peak, inflamed by the influx of foreign buyers, especially in the most expensive areas.
This reflects London’s continuing global appeal. But the result is an average age of first-time buyers approaching 40, more than a decade older than when I bought my first cramped flat off the Archway Road. The average house in the capital costs approaching eight times the average salary. To put it another way, the typical worker can afford only half a house on the maximum available mortgages.
One result is falling home ownership, down to its lowest level for 25 years. This is not necessarily a bad thing. But the lack of homes is also driving up rents and increasing the already immense pressure on social housing — especially in London, where a majority of households now rent, despite costs rising at more than twice the rate of inflation.
The Bank of England took steps yesterday to increase the flow of mortgage money. A welcome move — but more lending does not necessarily lead to more housebuilding, as seen during the last boom. It can just encourage the subdivision of properties into ever-smaller flats, while the last thing needed is any revival of the stupid lending that has left such deep scars on the economy.
Housing is a complex issue that involves so many interlocking economic, financial, social and political interests that even the most tentative proposals can lead to a brutal backlash. Just look at how ministers appear to be reining back on a mild suggestion to permit slightly bigger extensions without need of planning permission.
Meanwhile Nick Boles, the new planning minister, will have spent his Christmas break smarting over the kicking he received after daring to suggest another three per cent of Britain could be developed. Yet in truth he should have gone further in confronting vested interests that are checking economic growth and the wellbeing of so many people.
Reform is being stymied by hoary myths buried deep in the national psyche. Surveys have found most voters believe two-thirds of their country has been built over. Yet nearly twice as much of the country is covered by woodland as is covered in concrete. Indeed, if you discount urban green spaces, only 2.27 per cent of England is actually built on.
Then there is the belief these islands are overcrowded. True, it can seem like that at times on the Tube. But we are less packed than other European countries such as Belgium and the Netherlands. And it is worth noting that Surrey, seen as one of the most desirable parts of Britain, reflected by its hefty property prices, is more than twice as densely populated as the national average.
A third myth is that of the Nimby, the concept that communities inevitably resist change. Yes, they will oppose plans imposed by avaricious developers or insensitive bureaucrats. But equally, they are comprised of people who want to live in thriving places and whose relatives cannot afford homes.
Cerne Abbas in Dorset is among the most beautiful villages in Britain and has resisted major developments in the past. Now a trial scheme has given residents control of their own planning. The result is a community-led proposal to create another 30 homes. “We recognise we have to grow or we will lose our school, our shop and our pub,” said Tom Handley, chairman of the parish council.
The biggest myth of all is that of the green belt, the sacred wartime legacy that left a huge doughnut of land choking the capital in its devious embrace. Three times bigger than London itself, it forces development deep into the countryside and commuters to travel further to work, driving up their costs, as we have seen again this week.
Forget those bucolic visions. Nearly two-thirds of this land is given over to intensive farming, while the rest includes everything from gravel pits to parts of Heathrow. While we protect these often dreary spaces, developers speculate with land banks and landlords profit from soaring housing benefit.
Britain, and especially London, needs more housing, better housing and cheaper housing. There is no shortage of land, just a system out of sync and a dearth of land that can be built upon. If we want to resolve this crisis, we must tackle an archaic planning system and take on myopic myths over a land that remains green and very pleasant.
Categorised in: Business & economics, home page, Housing, Public policy