On the Perpetual Housing Crisis in the UK
British housing has a long-established track record of being bad. Along with the legendary reputation for damp and mould, visitors marvel at our unmatched ability as a cold country to build dwellings that are freezing during winter. Build qualities are notoriously poor. What’s more, they’re small. The average British new build is tiny compared to its foreign counterparts. And in the last 20 years, it’s been gaining a reputation for being expensive as well. Prices rose by 11% in the last year alone, and nearly 500% since the beginning of the ’90s.
Yet despite this being a problem that affects absolutely every part of our society, discourse on the topic is often shockingly naive – among our elected representatives as well as people who are supposed to be experts on the matter. Commonly advanced talking points about the origins of the problem fail to stand up to even basic scrutiny. We don’t have a great shortage of land; only 6% of the country is developed. Although NIMBYs do throttle development at the local level, their power stems from longstanding national policy. Complaints of public housing shortages and “greedy” buy-to-let landlords ring hollow – private rentals and social housing account for roughly the same proportion of total stock.
To put it bluntly, the simple cause of our housing crisis is that there are only 24.7 million houses to go around 27.8 million households. This is of course further exacerbated by importing the equivalent of the population of Hull every single year.
Britain’s current housing shortage is founded on a legacy dating back to Victorian slum clearances. A large part of the current crisis actually originates in previous attempts to fix it – particularly in the public sector. Housing stock from virtually every decade has been dogged with structural issues, peaking infamously with the great housing disaster of the early 1980s.
And yet the single most important barrier to ending the crisis for good today is neither economic nor geographic, but legal.
Beginning in the 19th century – a period of growing urban sprawl and slum overcrowding – there were calls for the government to both massively increase and massively restrict development. The post-Second World War Labour government formalised both of these positions in the Town and Country Planning Act (1947). This act has probably had a more long-lasting effect on the character of the country than any other piece of legislation. Until 1947, the only permission usually required to develop land was ownership. By introducing the modern system of planning permission, the Planning Act effectively nationalised building.
As well as giving local authorities the power to approve or disapprove the building of virtually any permanent structure, the Act also served as the basis for the legal status of our 14 metropolitan green belts – and imposed a series of Local and Structure Plans that dictate the scope and location of future development.
In its updated 1990 incarnation, the act still serves as the basis for all residential and commercial development. All attempts to simplify it have made it more complicated, producing a bewildering array of environmental guidelines, accessibility guidelines, and safety guidelines. An entire sub-industry of planning consultants has arisen to navigate its system of restrictions and perverse incentives.
(This list from the Construction Wiki details some 30 separate pieces of documentation that might be requested in an application, and doesn’t even account for the need to meticulously document communications and manage the entire process.)
If you’ve ever wondered why virtually all new build developments look the same – the sort of squat, pseudo-vernacular, small-windowed, tiny-gardened featureless Family Dwelling Solution endlessly lampooned on Twitter as the “Deanobox” – this is why.
Regulations conspire not only to ensure the uniformity of all new housing, but also much of their sterility. Tight restrictions on build standards, location, and density create odd deposits of buildings on marginal land on the edges of towns and the sides of motorways.
Strict requirements for planning permission – combined with the tiny slivers of lands which Local Plans and their successors make available for development – conspire to drive prices up. By 2013, the cost of land itself accounted for over 70% of the cost of building a new property. In the 1950s, it was only 25%.
Perhaps most perversely, the Planning Act was passed almost contemporaneously with the New Towns Act of 1946, which mandated the creation of multiple new settlements from scratch. The strict limitations on building and redevelopment imposed by the Planning Act make it virtually impossible to regenerate many of these “new” towns for fear of “affecting their traditional character.”
But this is only half the story.
The 1947 act also transformed housing into a core arm of the welfare state.
Nye Bevan, who also brought you the insatiable value-destroying black hole that is the NHS, created a system of council housing intended to end private development altogether – laying out a vision of estates where “the working man, the doctor and the clergyman will live in close proximity to each other.” The Conservatives – faced with a continuing postwar shortage – largely continued this policy. By 1980 a third of all housing in the UK was council-owned – home to just under half the entire population.
It’s a widespread popular belief that council housing essentially doesn’t exist in Britain post-Thatcher. This couldn’t be further from the truth. Around 17-18% of our stock is still council housing – roughly on par with private rentals. In some local authorities – London boroughs in particular – council housing actually constitutes the majority of all residential property.
And more of it is being built all the time. You just won’t usually hear it referred to as “council housing” anymore. Despite a decades-long attack on our education system, Britons are still capable of pattern recognition. Nobody wants a “council housing” on their doorstep anymore, such is the reputation of the sink estates of the late 50s and 60s for a range of social ills.
The Blair government, knowing this, adopted two mechanisms to conceal the creation of additional social housing: housing benefit, and “affordable” housing.
“Housing benefit” originally allowed a tenant to claim the cost of their rent in private accommodation. Usually, this has to be outfitted to a specific standard, but was extended to a claimant’s current accommodation for the recently unemployed. The practical outcome of this was that any property could be transformed into social housing overnight.
Although housing benefit was substantially cut back by the coalition and Conservative governments post 2010, more than 3 million households still claim it.
“Affordable housing” encompasses council housing by another name. Under one of the provisions introduced in 1947, councils can demand builders pay “development surcharges” as a condition of planning permission. This was originally intended to pay for public roads and infrastructure. In the modern day, it is often levied as a command that a certain quantity – usually 20% – of new homes be set aside as “affordable housing.”
As well as being a provision to disperse council housing throughout otherwise “private” communities, these “affordable housing” mandates go some way to explaining the thudding monotony of modern new build developments. They must conform both to a mountain of regulations, and to the standard that local authorities and housing associations require for social housing.
In the recently produced London Plan, the Mayor’s office declared that no less than 50% of all new residential property developed in the capital must be “affordable” housing – rising to at least 65% in the long term. Since all units must be built to standards that make them appropriate for “affordable housing”, a back door is also baked into the system to nationalise private units as needed.
In conditions of pronounced housing shortage, “affordable housing” simply worsens the problem. Every “affordable” house built represents one which can neither be bought nor rented freely. This will especially exacerbate the issue of unaffordable rents in areas like London, where properties are already in short supply in no small part due to the over-abundance of council housing.
The mess of statute, semi-official and official “guidelines” issued by individual local authorities, the non-profit organisations that lobby for housing to be allocated to specific groups, and the third-party specialists that inevitably arise to help individuals and organisations navigate it all is characteristic of what some have started to call “The Blob.”
In short, the Blob is the mode of governance that arises when the state outsources its responsibilities to “independent” bodies – whether they be “arms length” entities like “agencies”, “quangos”, “managed services companies”, nonprofit and charitable organisations, or private companies – in an attempt to absolve itself of accountability for its actions.
The Blob achieves policy objectives nobody wants under a cover of subterfuge, process manipulation, and weasel-talk. For instance, the London Plan’s accompanying Equality Impact Assessment sets very clear expectations for the allocation of London’s new “affordable” housing, and makes it very clear that the lion’s share will be set aside for “BAME Londoners”. This can be interpreted as fulfilling two needs. The first is for London’s duly elected representatives to distribute spoils to their majority-nonwhite supporters under the guise of social justice. The second is to provide housing to the growing population of recent immigrants in the capital who would otherwise be unhouseable – a Sisyphean undertaking considering present net migration levels.
Most importantly, the Blob’s advance completely destroys the distinction between the public and private sectors. This is nowhere more in evidence than in the plan’s accompanying documents, which make it clear any building in the capital will be contingent on the developer conforming to a series of exacting public sector diversity mandates. If the only way for a private company to operate is to attach itself like a male angler fish to a totalising state, can it really be said to be “private” at all?
What’s the answer? To simply allow people to buy land and then build houses on it. But the government will never permit that to happen, as it would basically require the current incarnation of the Planning Act and its various subordinate legislation to be abolished. This would of course be met with – and indeed has already been met with – considerable resistance on many fronts. Some loci of resistance would have to be bought into alliance – not least property developers themselves, who benefit enormously from the current system even as it constrains their actions – others (i.e. NIMBYs) could be safely ignored.
The precise mechanism for a transition from the current system to something more rational isn’t clear. We could perhaps learn from the only relatively successful period of development in our history. In 1923, in an accidental 2-month period as Health Secretary, Neville Chamberlain made large amounts of public subsidy available to builders for speculative development. This led to over 2.8 million houses being built in very short order, all selling at prices affordable to the middle classes – and even in some cases to better-paid factory labourers. This period also saw the single largest growth in owner-occupancy of houses in our history.
How exactly the current deadlock is broken, however, is less important now than understanding the problem itself – and understanding that solving it is a simple matter, even if it might not be easy. As someone else once said: it wasn’t always this way, and it doesn’t have to be this way.