Why don't we just be sensible about housing?


A fine piece in the Telegraph about British housing. The major point being that we have so many layers upon layers of housing policies, each trying to undo the inefficiencies created by the previous layer, that we might as well scrap the lot and actually have a free market again: Each and every proposal wheeled out in the course of the election campaign involves yet more complexity. Hidden subsidies are added to distortions, and rules and regulations are piled on top of each other until their purpose gets lost. If a therapist was analysing British housing policy, they’d quickly conclude the patient was suffering from obsessive-compulsive disorder. The Government comes up with one kind of subsidy, doesn’t like the side-effects, then comes up with another to try to correct it.

In fact, the simplest thing would be to strip away all the distortions, and try creating a free market in housing.

Quite so, we have been saying this for some time ourselves. Just as an example, the last time the British housing market managed to produce the level of new build that all say is necessary today was in hte 1930s. That is, before the Town and Country Planning Act and back when we did in fact have a free market in who may build what and where. If we want to get back to that level of building then why on Earth don't we go back to those policies? We do, after all, have actual evidence that it works.

Worse, and this is less widely discussed, our homes are getting smaller. A survey by LV Financial Services last year found that the average size of the British home had shrunk by two square metres, from 98 to 96 square metres, in the decade from 2003 to 2013. The average new home built in the last five years measured only 76 square metres, so that average is only going to come down. According to research by the think tank Policy Exchange, we now have the smallest homes in Europe. Even the Greeks have more space to live in than we do.

The average Irish home is 15pc bigger, a Dutch one 53pc, and a Danish one 80pc more spacious. Those are huge differences, given that many of those countries are poorer than we are, and just as densely populated.

Why are we doing this to ourselves? Insisting that people live in rabbit hutches that cost 5 and 7 times annual incomes? And, as we all know, the major cost of a house in the SE of England (where the problem actually exists) is that scarcity value of the chitty to build a house on a particular piece of ground. Simply issue more chitties and the problem is solved. Better yet, abolish the system of chitties altogether.

You know, the way to solve problems caused by government is to get government to stop doing the things that cause the problems. Housing is expensive in England because of government, let's have less government and make housing cheap again.