Why Britain has the nastiest new homes in Europe

Housebuilders are building the smallest, meanest properties they can get away with. That needs to be fixed – by regulation if necessary.

I wrote in last week's magazine aboutthe myth of tiny UK houses.Most people think that the average size of a UK home is smaller than the average size of any other European home. It isn't. The simple truth is that UK houses are on average roughly the same size as houses everywhere else in Europe around 95 square metres.

That doesn't mean that we don't have a problem. We do: our new houses are genuinely tiny. New houses built in the private sector average a mean 76 square metres. The question is, why?

Matthew Lynn puts it down to planning.I'm not so sure on that if you read this old blog post, you will see that there isn't nearly as much of a problem with planning as most people think London is awash with new developments and there are some 400,000 as yet unbuilt houses in the UK with full planning permission.

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So, if that's not the problem, what is? One answer from the New Home Blog is thatthe UK has no minimum build standards for private homes. We have a long history of imposing size requirements or at least firm suggestions on housebuilders (you can read the full history inthis remarkably comprehensive reportwritten for the Greater London Authority a few years ago) but at the moment, outside the London guidelines at least, anything that bumps up your margins, and that you can disguise successfully in a show home, goes.

This isn't the case elsewhere many other European countries set minimum sizes with either regulation or via fiscal incentives. The same is true invarious municipalities in the US.

And it makes sense. Tiny houses aren't good for anyone except housebuilders. The Royal Institute of British Architects likes the idea,and so does the National Housing Federation.

Clearly the House Builders Federation (HBF) doesn't fancy it so much given the amount people can afford to pay for houses it is more likely to hit their margins than to hit end prices. But their stated reason for rejecting it that they only build what the market demands really doesn't stack up.

As the report I mentioned above notes "there seems to be a mis-match between homebuyers' preferences and what the market is providing. Homebuyers express a preference for houses rather than flats, more bedrooms and larger rooms for living and storage." Given all this I suspect that minimum living space standards might be worth more discussion than they get at the moment.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.