Just what is wrong with British housing?

Mark Carney, the governor of the Bank of England, warned that Britain’s housing market was the “number one threat to financial stability”, says The Times. He said that the root cause of rapidly rising house prices was a lack of building.

According to Savills, population growth has outstripped house building by 19% in the past decade; we should be building an estimated 230,000 new homes each year just to keep pace with demand.

The idea that we need to build 250,000 houses a year is “nonsense”, says Simon Jenkins in The Guardian. This “need” is based on crude household formation, without any reference to “demand, price, migration or anything else”.

Yet, this is seized upon by newbuild lobbyists, fuelling panic about planning delays and driving young people into “desperate over-borrowing”.

The housing pundit, Danny Dorling, says the main problem is chronic under-occupation. The 1971 census return showed Britons enjoying 1.5 rooms per person; today, with a larger population, the figure is 2.5.

Britain has a “huge stock of empty and underused residential space”. London’s employment density is similar to New York’s, yet its housing density is less than half.

The problem is that, as owner-occupiers, two-thirds of us are invested in rising house prices, says Deborah Orr in The Guardian.

Our houses tend to earn more than we do. This explains why, although politicians have been calling for a house-building boom for decades, they are “privately relieved that it never really seems to quite take off.

Any party that presides over low interest rates and rising property prices will now achieve good poll ratings.”

Inequality is rising, and now parental assets are likely to have a greater bearing on young people’s financial future than their education. “So much for meritocracy.” We need to create a tax system that helps the “vulnerable minority” of renters on low incomes.

  • Ellen12

    Danny Dorling is right. There are empty properties all over London and the South East. Unfortunately, Deborrah Orr is right in that there is too much vested interest involved in housing shortage and among the biggest interests in making adequate housing unobtainable are those people with large property portfolios who sit in the house of commons pretending to represent the interest of citizens in this country.

    As a little exercise to prove Danny Dorling’s theory, pick any London (or surrounding county’s) postcode, look it up on Rightmove – selling or renting – and you will find at least 10% of the dwellings on there empty, with people holding out for sale prices and rents that Kim Kardishian would have trouble finding the money for. Then, of course, there are the London homes being held as investment that aren’t even being advertised. The housing crisis would be a long way to being solved if, instead of having a “Mansion Tax” of 1% pa, have an empty property tax of 3% pa.