Edward Dawson is Director of Campaign for Rural England [CPRE].  He has been a Conservative Party activist for many years, and a councillor and parliamentary candidate.

Politics of Housing the Nation

House prices have increased by 8 per cent over the past year.  112,630 houses were built in that time, a rise of only 4 per cent.  As the economy improves, prices are already jetting away and threatening another spike.  The Bank of England is warning that government attempts to help entrants to the market could fuel a boom.

Housing is one of the most potent areas of public policy, and one requiring continued attention and review.  Is Mark Carney right in these warnings?  What should the political response be?  We also hear about the need to build more houses and release land.  Checking the statistics is a useful aid, but can be misleading.  You need to know what you are looking for.  Is policy on finance and land use working in harmony?


Just before the crash in 2008, we were building 185,000 houses a year.  The ambition then was for 240,000 homes per annum by 2016.  To achieve this, many suggest releasing Green Belt land.  Others dream of building rates not seen since the 1990s.  They reject suggestions of overheating.  Many comments are London-centric.  There seem to be two housing markets now, London and the rest of the UK.  Perhaps we should say London and the South East versus the rest?  If the average house price is £193,000, in London it is £460,000; more expensive to acquire, but probably a better investment.

London house prices are 15 per cent below the 2007 peak, but still 13 times average earnings.  Prices may not reach the 2007 level until 2017.  Lloyds give 4 x annual income for half their loans, and they acknowledge price fluctuations.  Lowering the limit for Help to Buy has been recommended as a solution.  The problem is that every bit of tinkering has unintended consequences, and can be counter-productive.

Housing has long been a hot political issue, with few initiatives found sustainable in the long run.  Reckless lending and high prices caused the last crash.  Those on average earnings cannot afford a big deposit, but they can support monthly payments.  There may be problems if interest rates rise.  Huge multiples of annual earnings are frowned upon by some lenders.  The Help to Buy scheme is really a mortgage subsidy, so will add to overheating – an example of mistaken tinkering.


Making more land available is a constant cry to solve the crisis, but it means building on greenfield sites, or even the Green Belt.  There are armies of objectors who will oppose all such moves, and with some justification.  In the past, planners sought to control housing numbers to their area’s environmental capacity, but current Government policy is to ignore that capacity – a car-crash in the making.

Due to the scale of development in parts of England over the last fifty years, the capability to absorb more without damage to the environment is now limited.  Housing is a complex area of policy, and few understand how the market works.  One reason is that housing professionals pay little attention to the planning system when they call for more housing.   Are New Towns the answer?  Should Green Belt land be given up?  Many local councils are looking to see what land needs to be allocated.  The government has announced possible new garden cities, the first of which is Ebbsfleet in Kent.  But while it may ease the housing shortage in that area, the provision of 15,000 new homes over a long period of time will not have a major impact on property prices across the country.  They also take time to plan and build.

The response

What should the political response be?  Labour talk about building 200,000 new houses.  It forgets that governments do not build houses – the market that does that.  What would be needed to achieve that?  Localism is not likely to produce a surge of development.  A strategic approach is the only way to provide sufficient housing in a manner acceptable to all concerned.

The much-maligned Milton Keynes was the last New Town to be designated, in 1967, but it has achieved jobs growth and relatively low house prices over a long period.  We may not want more new towns as such, but designating larger areas for growth and regeneration has a clear role.


Almost every attempt to stimulate the market will also spark a certain amount of inflation.  There is latent pressure for inflation in the system already.  What we don’t want is another housing bubble, but politicians seem likely to create one.  The Chartered Institute of Housing believes the country needs 250,000 new homes a year to meet demand and put a brake on prices.  However, ‘need’ can be more narrowly defined: 100,000 more affordable homes are needed, according to the National Housing Federation.

In this regard the private rental sector should not be undervalued.  It remains important, and should be encouraged.  Nine million now rent in the private sector across the UK, and rates outside London have not risen disproportionately.

But we all want our houses to go up in value.  No one truly wants values to diminish.  This is perfectly natural.  It is healthy for all property to increase in value over time, and all development should seek to enhance value.  But these should be genuine increases in value, not just price inflation.

There have been at least ten Housing Green Papers over 40 years, but only during Margaret Thatcher’s period in office was there real change.  Council houses were sold to their tenants and the private rented sector was revived by law reform and the introduction of ‘short hold’ tenancies.  In other periods, governments have just repackaged commitments already made rather than introducing new ideas.  Despite this, the nation is better housed today than ever, but this ‘big issue’ remains potent.  There is no single solution, but clearer strategy in both planning and housing has always achieved better results.

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