After much lobbying by largely southern Conservative MPs, the compulsory housebuilding target set by the Government has been dropped. The target – which sought to ensure that 300,000 houses were built across the UK each year and legally mandated local councils to try and achieve it – had long been a target of derision, with Liz Truss previously describing it as “Stalinist” and other Conservative opponents viewing it as discriminatory to local interests. The dropping of the target comes at a time when average house rental prices are climbing to rates that have never been seen before and when the prospects of home ownership for many people seem to be disappearing faster and faster. As the proportion of people’s income that rent takes up continues to grow ever larger, aspirant graduates, young people and even families find themselves either struggling to put enough money together to fund deposits for buying a house at best, or priced out of the most economically dynamic areas at worst. Britain’s inability to build enough houses that are both affordable and desirable is slamming the brakes on economic growth and destroying the feeling for people up and down the country that they are enfranchised in future prosperity.
In light of the serious risk that Britain’s housing crisis poses, why then do so many in Parliament and in local councils seem so keen to actively make this situation worse? Unfortunately, a pernicious brand of localism and wilful ignorance seem to be at the heart of it. For students and recent graduates, the most immediate impact of the housing crisis has been on the significant rise in the competition for and prices of rental properties. Nonetheless, of course, the issue of home ownership is as important with the increasing unaffordability of housing resulting in those lacking asset-owning parents or grandparents being gradually excluded from the prospect of owning their own home.
Following the removal of the target, several other changes to planning and housebuilding policy have been announced, including changes to the former ‘compulsory target’ which is now only an ‘advisable figure’. Alongside this, local councils will be given greater powers to block projects that might “significantly change the character of an area” and also rules around landbanking, the practice where developers sometimes buy parcels of land but don’t immediately build on it, have been strengthened. These proposals, submitted in an amendment to the overall Levelling Up and Regeneration Bill, have rightly been criticised across the political spectrum. Labour’s Lisa Nandy described it as “unconscionable in the middle of a housing crisis,” whilst former Conservative Levelling Up Secretary Simon Clarke labelled it as a “NIMBY’s Charter” (Not In My Back Yard). Projections from the centre-right think-tank, the Centre for Policy Studies (CPS), show that the rebel amendment will have an immediate impact. Their calculations suggest that scrapping the compulsory target will see housebuilding drop by at least 20 percent, with 40 percent a potential worst case scenario, and as many as 800,000 jobs in the construction industry and related sectors being placed under threat.
Whilst these are just the projections of what is to come, the effects of Britain’s inability to build has already been seen across the country, including in York. Looking back over the past few years, in 2019-2020, weekly rental prices of around £120-£130 including bills were very normal for most students. Presently, a quick look at most of the student letting agencies are showing properties for £160 a week at the very minimum, with the speed at which properties go and the competition for each one increasing year-on-year. York is a particularly illustrative example of how Britain’s broken housing system is choking off prosperity and growth. The city itself is undergoing a significant period of economic dynamism and has consequently been attracting more and more ambitious graduates and young people seeking to live and work in the city. At the same time, the university has been undergoing a significant expansion over the past three years, attracting more and more students from the UK and abroad. This increase in the number of people seeking to live in the city has not in any way been matched by a commensurate increase in the availability of housing supply. The result? Intense competition for houses that leave the market at record speeds and aspirant people and families having to live further afield, therefore not being able to take part in the very economic activity the city is trying to facilitate. At universities, increasing numbers of home students (who come from more diverse economic backgrounds relative to their international peers, and are consequently more affected by rising housing costs) are being priced out of traditional student areas and living on increasingly tighter budgets.
Clearly, the result of a system that is not facilitating the provision of enough houses is already having a demonstrable impact on the economic and social vibrancy of cities and towns like York. However, the risk that this situation might become even more acute has now taken a major step forward with the housing amendment. In a highly informative article, the CPS director, Robert Colville, outlined how the mandatory housebuilding target at least bakes in several pro-build strands into general housing policy. Structurally, the “presumption of sustainable development” in council planning ensures a bias towards housebuilding unless there’s a genuine reason not to. Secondly, central government demands that local councils identify future land supply and present their findings in order to show that they are ready to anticipate future demand. As well as this, central government has the right to instruct councils to present these plans annually so as to prevent housebuilding from stagnating. Despite the system’s faults, these processes are empowered by the mandatory housing target. Unfortunately, the rebel amendment dismantles it entirely. The amendment practically entrenches NIMBYism as the de facto position in housebuilding policy and takes a wrecking ball to the fragile balance between local interests, consumer demand and government policy.
The effects of not building enough houses are slowly coming home to roost, and the cognitive dissonance required to be a NIMBY is potentially starting to be made apparent. Very recently, locals in the North Yorkshire village of Hovingham were outraged at the prospect of the village primary school being closed as the number of pupils has slowly dwindled over the years to zero. Campaigners argue that the school’s closure will have a harmful impact on the village’s character. At the same time, village councillors have consistently opposed attempts at building new houses. The resultant mismatch between supply and demand has caused house prices to reach such a state that young families are priced out and the village then stares down the barrel of losing key community facilities like the school, potentially driving existing families further away. The potential doom loop that places like Hovingham’s NIMBYs have willingly walked themselves into shows us how entrenched local interests, who control housing supply, have to be balanced against aspirant people and families, who represent the demand, seeking to move and genuinely take part in dynamic and vibrant communities. Local and national government have a key role to play in this too, with local government’s expertise regarding local priorities and concerns being balanced with central government’s ability to provide that important external and pro-growth impetus.
The housing amendment may be dressed up as a successful effort to wrest power from government and hand it over to local people, however the idea that this will help increase housing supply or the affordability of both renting and ultimately ownership is, frankly, for the birds. The misguided logic of one criticism of the current system, made by MPs like Bob Seely and Theresa Villiers who wrote the amendment, is that housing targets were not evenly distributed across the country. This very obviously obscures the fact that there are acute shortages in particular areas that are often the most vibrant and active communities. Although at the extreme end, the rental situation in London serves as a stark example of how the failure of housing supply to keep pace with specific areas of demand has caused an unenviable scenario which is choking off growth and prosperity. I spoke to several friends who have very recently moved to London to start new careers after graduating at the end of the last academic year. They spoke of staggering levels of competition, including one example of how a property was pulled from a lettings agent after being publicised for an hour and a half and receiving 70 applications. Likewise, offers above the asking price are now often the very minimum that is required to secure a place, with landlord’s sometimes asking for a second additional price offer after a verbal agreement has been reached. With ever increasing demand chasing too little supply, rental prices continue to climb further, eating into people’s already highly taxed incomes and decreasing the disposable income that could be used to save for a house deposit, let alone actually be used to enjoy the very cities they have moved to.
Given the crisis that this country is currently facing, it’s scary to think how the institutionalisation of NIMBYism in British politics could make this situation even worse in the coming years. In many ways, the real anti-growth coalition is made up by those backbenchers in parliament, bent on stifling a whole generation of prosperity and wealth up and down the country, and those short-sighted local officials in places like Hovingham who, in an effort to supposedly protect an area’s character and house prices, are killing off the places they love. The fact that Britain’s inability to build has sharpened under the inheritors of Thatcher’s dream of a property-owning democracy is an irony that surely will not escape thousands of voters. The wilful ignorance demonstrated by the organisers of the rebel amendment is, itself, indicative of the wider malaise in this country’s dangerously poor approach to housebuilding and the ways in which it is entrenching inequality. Let’s hope that those in power can wake up and smell the coffee, and ensure that we can start building before an aspirant generation is squeezed out of prosperity.