As we've been saying, it's all about land prices


Or as we've been saying in rather more detail: the price of housing in Britain is really about the price of the chitty that allows you to build a house on a certain piece of land. For there's no real other reason that housing should not be at about the cost of building a house. As this builder is showing:

The company uses figures from the annual survey of hours and income to work out where it can build, and has identified other parts of the UK where it could construct affordable two-bedroom semis for couples. Across the north of England it thinks it can build homes affordable to those on a household income of just £23,000, and going further south, including Kent, believes it can sell to those earning £27,000. Harrison says this would require a different approach, possibly involving local authorities selling the land at a lower price but keeping some equity in the houses.

The actual build cost of a two bed semi is in the £80k range, that for a larger 3 bedder perhaps £100k. So, why isn't it possible for people to build to that price in the South? And ifthey were, why aren't we inundated with firms looking to make the 75% margins that would come from doing so?

The answer being that we've an idiot planning system which determinedly, purposefully, with malice aforethought, refuses to licence land for building houses upon anywhere near people would like to have a house to live in.

We're not going to solve the housing problem until we solve this problem. The correct answer being to tear up the Town and Country Planning Acts and go back to what prevailed the last time the private sector managed to house Britain, a free for all. The thing being that we really did learn this lesson last century: markets work and planning doesn't. The Soviet Union's economy collapsed into rubble because they tried to plan the whole economy. The parts of our economy which don't work are those subject to that very same mistake of planning.