Last weekend Richard Rogers’ renowned architectural practice Rogers Stirk + Harbour built a three-storey house in the courtyard of the Royal Academy in under 24 hours. Spacious, modern and environmentally friendly it went from flatpack to fully built faster than I could assemble an IKEA wardrobe.
But while it only takes a day to build a family home, the average family in England now needs to save for 12 years before it can afford a deposit. The average London family takes 20 years, by which point their kids will presumably have left home anyway. This irony is made all the more painful because it is largely the result of an avoidable failure of government policy.
With many public policy problems – reducing carbon emissions, for example – the best solution to pursue is not entirely clear. With housing, it’s embarrassingly obvious: we need to build more homes. Estimates vary, depending who you ask, but we probably need to build about 250,000 houses a year to get this problem under control. Last year we didn’t manage half of that.
If we allow this to continue then we will become a nation of renters, forced to pour an ever-greater portion of our income into the pockets of landlords. In London, where the crisis is worst, the median London household now has to pay almost half of their income to afford the rent on the median two-bedroom home. Living in a big cities is supposed to make us more productive – and better-off as a result – but researchers at the LSE now estimate that all of this ‘city bonus’ is frittered away by the excessive cost of living in our major cities.
The housing crisis is also a very big part of the living-standards crisis. The Trust for London estimates that 11 per cent of Londoners are pushed over the poverty line due to the cost of housing in the capital. That’s worth repeating: one in every 10 Londoners. Meanwhile the state is squandering £23bn a year on housing benefit (one sixth of the entire UK budget deficit) plugging the affordability gap. The recent Channel 4 documentary How to Get a Council House exposed the tragic consequences of the housing shortage in Tower Hamlets. Just under 25,000 people are waiting to be housed in the borough, because they simply cannot afford anywhere to live at market prices; while just 40 properties a week become available. This is a failure of public policy so egregious it makes me wince.
It doesn’t have to be like this. While real house prices rose by 4.5 per cent a year between 1970 and 2006 in the UK, in Germany they managed to keep real prices completely flat. Neither did we have this problem before the 1980s. Between 1955 and 1980 we built more than 250,000 houses a year, every year. The difference was that governments, national and local, weren’t afraid to wield state power and resources in order to ensure that people could afford somewhere to live. Labour’s ambitious programme of New Town building, though often architecturally deficient, helped keep the costs of housing at manageable levels. Nowadays the New Towns around London are mostly thriving.
It was only when the state lost the appetite for house building in the late 1970s that the cost of housing began its current, disastrous upward climb. Private sector housebuilding has since proven hopelessly unresponsive to increasing prices, remaining essentially flat over the 30 years prior to the 2007 crash while house prices were rising rapidly. We need to return to housebuilding on the scale of the New Towns but private sector developers are generally only interested in marginal developments of existing sites. They want to be sure of existing demand, be ‘in and out’ within an economic cycle, and many simply do not have deep enough pockets for development at scale.
Why aren’t people kicking up more of a stink about this? Writing this blog, I’m spoilt for choice for cringe-worthy statistics but my (least) favourite has to be this from Shelter: If food prices had risen as fast as house prices over the last 40 years then a chicken would today cost £51.81. Imagine if government had knowingly allowed food prices to rise this quickly – there would be rioting in the streets.
Unfortunately there are a lot of people with an interest in the status quo. The army of NIMBYs, backed up by the countryside groups, are powerful and vocal opponents of serious housebuilding efforts. Anyone with a home of their own also has an interest in the status quo as when house prices rise they can reduce their monthly mortgage repayments. This is why we want to set up a campaign – The Campaign for One Million Homes – to add some balance to the debate. We want to spell out just how absurd the situation has become, the pernicious way in which the costs fall on the young and the poor, and the need for more housebuilding. If you’re fed up with the mess we’re in over housing, please do get in touch. We need all the help we can get and we’re particularly keen to hear from anybody with web design skills or campaigning skills.
If Richard Rogers can build a house in a day then a Labour government can build a million new homes in a parliament. If we don’t, then nobody else will, and ordinary people will pay the price.
To get involved, or just to find out more, get in touch.
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Sam Sims is a policy researcher working in Westminster. He writes here in a personal capacity and tweets at @sam_sims_
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It’s also embarrassingly obvious that we need to stop importing millions of people when we don’t have the housing supply for those already here. But that didn’t stop Labour when they were in power.
Last I checked, there are 5 Million Brits living abroad.
Just saying.
That’s an issue for those countries and their housing needs. We’re discussing the UK. Do try to keep up.
There are around 2.5 migrants for every 1,000 residents. Given that the UK has one of slowest growing populations in the world (0.55%) and one of the lowest birth rates; I’m not sure we can afford to cut immigration any more than we already have. Of course, we’re all looking for someone to blame, but singling out Johnny Foreigner doesn’t make us any more up-to-date with the issue at hand. Still, I suppose it makes us feel better. While we’re at it: “They took our jerrrbs!”
I’m married to an immigrant myself, so I’m not ‘blaming’ immigrants. I’m blaming an increase in population, which can partly be attributed to immigration.
Immigrants make up about 13% of the UK population according to the census. The figure is higher in England, and again in the South East of England, where the housing shortage is more acute.
UK population growth is the highest in the EU.
http://www.bbc.co.uk/news/uk-23618487