Continued pressure to increase the supply of housing in the UK means that the green belt is increasingly coming under attack, according to the Campaign to Protect Rural England (CPRE). Developers plan to build 275,000 homes on these protected ribbons of land surrounding towns and cities (there are 14 in total across the UK) that's nearly 200,000 higher than four years ago, and 55,000 higher than at this time last year. In 2014/15, green-belt land accounted for 7% of all new residential land that's the highest proportion since 1990.
Green spaces around London in particular have come under huge pressure, with 117,208 homes currently proposed a jump of 25% in just 12 months. Elsewhere in the South East, Cambridgeshire has seen a 27% rise in proposed new homes. There's a 61% increase in homes planned on the green belt in the North West, while the North East expects an uptick of 44%, according to CPRE. All told, in the year to 2015, 11 local authorities finalised boundary changes to accommodate development, despite rules stating these should only be altered in "exceptional circumstances".
The CPRE has accused the government of breaking a general election manifesto commitment to protect the land: "we need stronger protection for the green belt, not just supportive words and empty promises". Yet others argue that we should be building even more on protected land.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
This month, the Centre for Policy Studies think tank suggested that the best way to deliver the estimated 50,000 new homes needed each year in London was to use green-belt land about 60% of London's green belt is within 2km of a train or tube station. "There is a pattern here and it's one repeated up and down the country," says Juliet Samuel in The Daily Telegraph. "It's the unwillingness of any serious political leader to tackle the holy cow of housing development: the green belt... Its benefits are massively overstated and it is slowly strangling the economy."
However, as York University economics professor Mike Wickens tells the FT, developers are hardly neutral in this building on the green belt is cheaper, and it's not as though there's a shortage of alternatives. "Most cities, including London, have lots of brown-belt land available." Of course, one solution to the housing crisis would be to allow interest rates to rise and house prices to fall. But we don't imagine any government will embrace that solution in the forseeable future.
Having said that, it's possible that the market might do the job for them. London's luxury housing market is continuing its slow-motion slide, and shows little sign of stopping, reports The Sunday Times. In a statistic that should be familiar to most readers by now, more than 54,000 homes with price tags of more than £1m are planned across London over the next few years, according to consultancy Property Vision. Yet that's far too many given the number of buyers at that level, and both Jefferies and Morgan Stanley have predicted falls of up to 20% in the price of new-build luxury flats this year.
Ian Hawksworth head of FTSE 100 developer Capital & Counties Properties insisted this week that the market is "just moving back to a normal cycle", telling Oliver Shah at the Financial Times that the surge in development was due to an unusually high number of Chinese, Malaysian and Singaporean customers wanting to buy off-plan property throughout 2013 and 2014.
However, City property analyst Mike Prew has warned that many of these foreign buyers are now struggling to sell these properties on for a profit as they reach completion, and are subsequently being forced to lower their asking prices. This has had a significant impact on the top end of the market property data group LonRes estimates that 78% of prime properties in London sold for less than their initial asking price last year.
Natalie joined MoneyWeek in March 2015. Prior to that she worked as a reporter for The Lawyer, and a researcher/writer for legal careers publication the Chambers Student Guide.
She has an undergraduate degree in Politics with Media from the University of East Anglia, and a Master’s degree in International Conflict Studies from King’s College, London.
December 2023 NS&I Premium Bond winners - check now to see what you’ve won
If you hold money in NS&I Premium Bonds, you can check from today (2 December) to see if you have won in the December prize draw. Here’s how to check.
By Vaishali Varu Published
OpenAI – corporate drama unleashed
OpenAI, the firm behind ChatGPT, was in uproar as its boss was booted out, briefly snapped up by Microsoft and then brought back again.
By Dr Matthew Partridge Published