That anyone in the UK could be optimistic about the future of housing there would be remarkable if it were not in the process of change and with a high likelihood of more changes to come. The problem is that there isn’t enough of it, and that causes it to be unaffordable to large chunks of the population.
The villain of the piece is the Town and Country Planning Act of 1947, which was ostensibly designed to protect green spaces around towns and cities. What it achieved in practice was never envisaged. It empowered home owners against would-be home-owners. It empowered incumbents against newcomers, residents against immigrants, the haves against the have-nots, and the old against the young.
It enabled those who owned homes to restrict the building of new ones, and thus to raise the value of their own homes, year upon year. Housing, instead of being about somewhere to live, became an investment, one almost guaranteed to rise in value more steadily and more surely than most other investments. It is not housing that is unaffordable to new buyers, it is the land which can be built upon, often 70 percent of the cost of a new home, that is unaffordable.
Although the talk is of countryside and green spaces, much of the land designated as green belt is by no means green. It conjures up images of fields, woods and meadows, but the reality includes much damaged and distressed land such as former industrial sites, abandoned and decaying factories, gravel pits, quarries and the like. Much of it is used for intensively farmed agriculture, with featureless landscapes of monoculture crops onto which pesticides and fertilizers are deployed, often running off to pollute local streams and rivers.
The enforcement of a rigid green belt ban on new build has placed not a protective ring around towns and cities, but a noose that constricts their development in ways advantageous to their inhabitants.
The reason for optimism is that policies are changing. Development within cities has relaxed to allow conversion of unused office spaces into residential units, and to allow existing homes to expand upwards with extra floors. The trend towards more online purchasing has left surplus retail spaces in urban areas that can now be sympathetically developed into housing.
The big change, however, is the change in attitude toward the land at the edge of cities classified as green belt. There are increased signs of an acceptance that more housing is needed in places where people want to live, and of a type that people want to live in. The cost of building land has led British housing to be the smallest in Europe, often with insufficient space and unsuitable for raising families.
This attitude change could be accelerated by a reclassification of the green belt into its three types: verdant land, damaged land and agricultural land. Those concerned for the environment could be assured that the green fields, meadows and woods need not be touched, while the building on non-green land within the designated belt could easily meet all the housing needs for the foreseeable future.
Provisions against development contained in the Town and Country Planning Act of 1947 could be replaced by a presumption in favour of development, subject to protections against nuisance.
The solution to the UK housing problem does not lie with helping people to buy by making loans easier, nor does it lie with the construction of more affordable social housing. It lies with the building of more houses so that they become more affordable. It is not the finance that needs to be easier; it is the supply. More homes equals more affordable homes.
The reason for optimism is that this is gradually coming to be appreciated, and opposition to new building is diminishing year by year. Older people want their children to become home owners, and are becoming aware of the limits the present restrictions impose on their aspirations. It will be a bold step to neutralize the Town and Country Planning Act, but it will create an unprecedented economic boom at just the time one is needed, which is one reason for supposing that it will happen.