First, a few words about the scope of the problem. Housing affordability can be measured by the Median Multiple, which is the ratio of a region’s median house price to its median gross income. On this measure, almost all UK regions (never mind Greater London) fall within a range between 4.5 and 7. This means that if a household in the middle of the regional income distribution wants to buy a house in the middle of the regional price distribution, they need between 54 and 84 monthly gross household salaries. That covers only the face value price of the house, not interest payments or transaction costs. These figures are extremely high by historic as well as international standards, and they would be dramatically worse if adjusted by space: newly built dwellings in the UK are the smallest in Europe.
For households in the bottom two deciles of the income distribution, housing costs represent about a quarter of their total budget. The belief that excessive housing costs benefit the poor, while curbing them would benefit the ‘rich and powerful’ is so grotesque that only George Monbiot could have made it up.
It is risible to suggest more social housing, or easier access to housing benefits, as an alternative. Social housing already accounts for almost a fifth of the housing stock – easily one of the highest rates in the OECD. Meanwhile, 18% of all households in the country receive housing benefit payments, a figure which rises to above 30% in Inner London. Of course we could house even more people publicly, and/or enrol even more on the Housing Benefit registry. But this would not lower the cost of housing; it would merely make it less visible.
So much for the status quo. But how about the claims made by organisations like the National Trust, the Campaign for the Protection of Rural England (CPRE), English Heritage or Hands Off Our Land that a less prohibitive approach to planning means bulldozing rural England?
There is a reason why these groups are so keen on emotionalising the debate by appealing to our affinity to natural beauty: in truth, the beautiful landscapes we see pictured on their websites are in no danger whatsoever. Only a tenth of the English surface area (let’s ignore the less densely populated parts of the UK) is developed at all. If there is one thing which England has in abundance, it is developable land.
|Greenspace and water||90.1%|
(Based on ONS Land Use Statistics)
If we had a market-based system of land use planning, a debate like the present one would never have been necessary: the price mechanism would automatically guide developers to those sites which local residents value least, while keeping them away from sites which residents truly cherish. But given the present system, the coalition’s proposals constitute a big step in the right direction. Land use planning has become the modern version of the Corn Laws. The coalition has U-turned too many times already; for a change, it should stand its ground this time.