The Centre for Policy Studies (CPS) has released a report making the case for the need to build more houses in the areas where people want them.
The Case for Housebuilding report has been endorsed by former housing secretaries Sajid Javid and Simon Clarke and former housing ministers Brandon Lewis and Kit Malthouse.
The report accepts that many of the criticisms of the housing sector are valid, but it takes aim at a series of myths that are helping to reduce support for much-needed new homes.
The myths include that Britain does not have a housing supply problem and that increasing supply would do little to reduce the price of housing to affordable levels because it is primarily driven by monetary factors.
Other myths are that there is sufficient brownfield land and there is no need for greenfield development.
The report highlights that in the 1960s, 3.6m homes were built, while in the 2000s and 2010s 1.5m homes were built each decade.
It argues that the fall in new supply is “even more dramatic” with housing stock expanding by 18% per decade at its peak but currently expanding by only 8%, despite accelerating population growth since the 1990s.
The size of new homes has fallen, with Britain now building the smallest homes in Europe.
However, house prices have increased from £4,741 in 1970 to £267,388 in 2021, representing a 207% increase.
The rising cost of housing is also shown in rents Private renters spent 10% of their income on housing from the 1960s to the 1980s, rising to 15% in London, but the share of income spent on rent has risen to 30% in recent years and almost 40% in London.
Homeownership has also become harder, with the UK now fourth from the bottom among European countries in terms of homeownership rates.
The report also highlights the views of Ian Mulheirn in that the rise of house prices is not just down to supply.
Factors such as the collapse in interest rates, the surge in global asset prices and the rise of buy-to-let (BTL) has increased competition for property and driven up prices.
Mulheirn argues “the current focus on boosting housing supply does not offer a solution to the housing crisis”, and that the housing supply is not just keeping pace with household formation but increasingly outstripping it.
He also argues that rents have not outstripped incomes, and this shows no shortage exists.
However, the report says “these views are simply wrong” suggesting that “other issues matter, but supply remains crucial both to house prices and home ownership levels”.
In terms of where houses can be built, a consensus has taken hold among Conservative Party politicians that homes can solely be built on brownfield land. However, the report argues that “levels of brownfield land are insufficient”.
It suggests that if “they could all be built on immediately and at once, they would only provide a land supply for four or so years” and notes that there would be strong competition from business and industry developers.
In addition, it says brownfield is “not distributed evenly” and is also in” areas where new homes are unviable or may require prohibitively expensive remediation”.
The report suggests that the focus needs to be on policies that support brownfield without ruling out the use of greenfield housing.
“We need to accept that the significant gap between planning permissions being issued, and houses being completed is not an indicator that the planning system is working perfectly, but a misleading statistic which multiple official reviews have found that it is related to problems within the housing system,” it adds.
The report also looks at the myth that building new houses is invariably unpopular.
It reveals that housing is now the sixth or seventh issue for voters in terms of priority, with many of those already owning homes.
The report also urges politicians to stop assuming that new homes are unpopular or to worry that new homes might push down house prices.
Voters overwhelmingly agree (81%) that the housing market is not working properly.
On a national level, there is overwhelming support for a large number of new houses being built, and on a local level, people support small or moderate numbers of homes being built in their area.
CPS researcher and co-author of the report Elizabeth Dunkley says: “Our report makes clear one simple, indisputable fact: that Britain needs to build more houses, in the places where people want them. To do otherwise is to court economic, social and increasingly political disaster.”
“The case for housebuilding is simple – without it Britain will be a less productive, less equal, less fair and less happy country. Building more homes is the clearest way to boost economic growth and rebuild our economy.”
