Why we aren’t building enough houses to meet demand

It’s not the planners’ fault we aren’t building enough houses. Or land-banking developers. It’s getting the infrastructure in place. So what can we do about it?

We aren't building enough houses, on that everyone seems to agree.

Two quick points to make on that. First, London is different. There, we seem to be in process of building more than enough. I've added the numbers up here before,but just to illustrate I have had another press release in this morning from property development group Ballymore.

It's got three whopping schemes underway. There's Arrowhead Quay in Canary Wharf; Phase II of London City Island on the Leamouth Peninsula; and Phase II of the "hugely successful" Embassy Gardens in Nine Elms.All in all, the three will create some 3,000 new homes and 250,000 sq ft of commercial, leisure and office space.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Add this lot to the other projects we've mentioned in the last year and it is clear, as one reader said to me this morning, that far from being a building desert, London is "seeing its greatest transformation since the Great Fire of London". Not long now and there should be no supply problem there (assuming everyone wants a two-bedroom flat in a high rise).

So what of the rest of the country? The story we hear most often is one of dismal planning laws and land-banking housebuilders. But as another reader pointed out last week, it isn't that simple. In fact, councils approve nine out of ten of the applications they receive. But some 400,000 homes in the UK that have been given planning permission have not yet been built. Why?

Ask a developer and he'll tell you it's about infrastructure. Getting permission is the easy bit. Negotiating to get a water supply and the like to a new development at a price that doesn't wipe out your profits is the hard bit. Any reader expertise on this would be very welcome.

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.