The housing crisis: taking on the builders

“Housing is the Government’s most pressing domestic issue,” said Liam Halligan in The Daily Telegraph. “Relentless” demand and inadequate supply have caused prices to spiral. Average house prices across the UK are now eight times the average wage – “a historically high multiple”. “Millions of hard-working people, who should be natural Tory voters” are unable to buy their own homes. This week, Theresa May gave “the first indication that she might be serious about solving this national emergency”. The planning system is partly to blame, as she conceded in her speech on housing on Monday. But, as she pointed out, it is the private sector that has really failed to deliver. Since the 2008 financial crisis, an average of 150,000 houses per year have been built, well short of the 250,000 needed. The big housebuilders are clearly sitting on their land, waiting for values to rise: this year in England and Wales, planning permission has been granted for some 423,000 homes that have not been built.

“Not before time, the Government has decided on a plan of action,” said The Times. Developers will be forced to build when granted planning permission or risk losing it. Their past performance in completing projects will be taken into account when assessing new applications. And they will no longer be able to wriggle out of promises to include affordable housing in new schemes (these are often watered down at a later stage on grounds of “viability”, to protect profit margins). Councils, for their part, will be required to plan and permit enough homes to meet local demand – or they will lose the power to decide where construction takes place. “These measures are all welcome.” But they are “still not bold enough to end the fundamental mismatch of supply and demand”.

If May really wants to increase housing supply, there are better ways, said The Independent. She could allow local councils to build new social housing again, as they did in the past, or to compulsorily purchase land at its current value and sell it on with planning permission to developers, using the profits to fund new public services. May’s aims are self-contradictory, said Simon Jenkins in The Guardian. To the young people who can’t buy homes, she is promising a massive increase in housebuilding. To the Tory nimbys, she’s promising no real change: the green belt will be protected and the countryside defended against “sprawl”. How this all fits together is anybody’s guess, particularly when the Government is also planning to build a chain of “garden towns” in the “corridor” stretching from Oxford to Cambridge. The Prime Minister “is becoming the maestro of contradiction”.