There is no housing crisis. There is just a housing market. There is no housing “need”, unless you are sleeping in the street. There is just housing demand and housing supply. There is also housing panic, housing lobbyists and housing stark raving madness, the last much in evidence last week.
The news that the government wants all children to learn economics is fine but ministers should go to the head of the queue.
The housing policy that Gordon Brown set out in his “Queen’s speech” was based on nothing more substantial than anecdote. Everyone knows a house that is worth five times more than “some time ago”. Everyone knows someone frantic to get “onto the housing ladder”. Everyone is eager to buy or sell. House prices are second only to sex on the mind of the macho British male.
The assumption that every adult citizen has a “right to a decent home” that they can “afford”, courtesy of the government, must be the last hangover of postwar socialism and a brainless basis for policy. It is matched only by the archaic belief of Yvette Cooper, the housing minister, that this right is reflected in a fixed stock of “housing need” unrelated to price or any other financial variable. She must think she is running Moscow’s housing department in the 1950s.
Cooper claims her Rip van Winkle officials have identified a “shortfall between demand and supply” of 40,000 units nationwide for people wanting a house they have not got but would like at a price they can afford. A sympathetic Brown agrees and says he will subsidise “the bulk” of them.
Thank goodness they are not measuring the need for road space or foreign holidays. They would meet one by lowering fuel tax and the other with cheaper air fares.
Need in an open economy is demand and demand is a function of price and supply. This demand for 40,000 unavailable and affordable homes a year could vanish with a change in interest rates or a tax on underoccupancy or encouragement to students to live at home. All might be sensible policies but none is mentioned.
Meanwhile if I wanted to trump Cooper’s statistic I could point out that some 700,000 houses are standing empty and developers’ land banks have capacity for 300,000 unbuilt units. My units may not all be where people want to live, but then Cooper’s figure is equally nationwide.
The reality is that Britons squander their limited living space more than any country in Europe. Densities are low and estates sprawl. City and town centres are underoccupied while roads are clogged with traffic seeking out-of-town retailing which the government has all but decontrolled under pressure from the supermarkets. To make matters worse, successive governments, Margaret Thatcher’s worst of all, subsidised home ownership as a vehicle for savings. Brown cut the subsidy but collapsed confidence in private pensions and reinforced the belief that “a house is a pension”.
This has driven up house prices, led to panic hoarding of space and burdened young people with debt.
Owner-occupation in the United Kingdom is now 70% of housing tenure, against 42% in Germany and roughly half in most comparable countries. The private rented sector, the most fluid and efficient form of housing, is ridiculed and persecuted with red tape, comprising a mere 12% of the market, against 23% in France and 53% in Germany. In most countries young people rent until they have saved enough to settle down and start a family (usually when their parents can help them by “downsizing”). The British market is inflated by hundreds of thousands of young people entering it long before it makes sense for them to do so.
Even so, if we can tear our eyes away from crazy headlines about London prices, the rate of house price inflation has not wildly outstripped other forms of saving. Only in the past two years (of cyclical boom) have houses caught up with the 10-times rise in equities since 1980. Terrorising the British people out of lending to the productive economy into oversupplying themselves with living space has been the stupidest thing this government has done. Then to claim a “housing shortage” is absurd.
Nor is there anything exceptional or “critical” about present housing costs. Political attention focuses on first-time buyers. For them the key figure is not the purchase price of a house, which they will probably sell long before they have paid for it, but the cost of finance. Lower interest rates have led to this plummeting. Median housing payments for first-time buyers were 16% of income in 1975, 18.4% in 1980, a savage 27% in 1990, 14% in 2000 and 16.8% last year. That is why banks will lend five times income today as against three in the 1980s.
Against all evidence, Brown believes that house prices are rising in response to lack of supply rather than his policies. Yet at the same time he wants his additional supply to be “affordable”, which will not increase open market supply. Nor does he say what affordable means. Every house is affordable to someone and nothing is affordable to others. Since the word is code for subsidised, it should be relevant only to the poor. Yet it is confused with “key worker” housing for often well-paid public servants (private workers apparently being superfluous), and with an even more bizarre “right” of country people to a subsidised house near where they were brought up. If villages want to offer such charity locally that is their business, but it is hardly a claim on the state.
The housebuilders’ lobby argues that prices are high because of a shortage of developable land. There is no shortage of land any more than there is of houses. The prime minister might care to join me on a tour of Portsmouth or the Thames Gateway, of the west Midlands from Solihull to Wolverhampton, of Derbyshire and South Yorkshire from Chesterfield to Barnsley, of the Merseyside M62 corridor, of Wearside and Tyneside.
Acres of former industrial sites lie idle, often land that the Germans, French or Americans would have rescued and beautified long ago. Those who have Brown’s ear want rural land in the southeast because that is easy to sell. They resent the fact that the southeast is so desirable as to be very expensive. But then it is expensive to service, carbon-rich to occupy and often ruinous of amenity.
A sound planning policy would encourage all new developments towards city and town centres, expecially in the Midlands and north, for the simple reason that this uses roads, sewers, schools and shops more efficiently, discourages car use and promotes community. Urban Britain is woefully underdeveloped but this is reversible. In a matter of five years, the population of inner Liverpool has risen fivefold simply by good planning of private sector activity. It could rise another fivefold.
If such effort, backed by land clearance grants, were repeated across Britain, Brown’s new homes would emerge overnight.
Of course an expanding and prospering population will want more living space over time. But it will not sensibly be found Whitehall’s way, by fighting constant guerrilla warfare against those seeking to preserve rural Britain. A better policy would be to decide, here and now, how much of Britain should remain green in perpetuity and list it as such, as cities list their treasured buildings and conservation areas: how much should be national park, how much preserved as farmland or green belt, how much for leisure and how much has no landscape or amenity value at all.
Such “listing the landscape” would not be bureaucratic, since even more categories exist already for grant and planning purposes. It would have two beneficial results. It would protect, notionally for all time, a resource that Britons say they value above all other aspects of “Britishness”, the countryside. Its custodians, mostly farmers, are already subsidised to care for it, while those avaricious to build will know they have no more chance than if they wanted a skyscraper in Belgrave Square. This offers the greatest boon to sound development, that of certainty.
The other benefit would be ironic. I believe a large acreage of England (we might call it green/brown) would fall into my bottom category and thus be available for development, which could be the better planned for being predictable. Builders would get more land than under the present mix of corruption and contention. Landscape that merits preserving would be preserved. The market could roam free over what is left. Economics would triumph over idiocy.
It is a bit too late for any government to do aything. If something had to be done, the time for it was when house prices were rising exponentially. In some places, prices have risen 73% in five years. Nobody did anything then, and now I am afraid its a bit too late. And yes there is a HOUSING CRISIS, because a financial correction is due. This is exptected when the price of any asset rises beyond its REAL value. So I don't quite agree with the author.
Paul, Dubai, UAE.
In Newcastle upon Tyne you can buy a three bedroom semi with garage and garden for around £125,000, close to the city centre. Are national media reports about house prices only talking about property in London and the south east?
Liz Walker, Newcastke, Tyne and Wear
If its false,why are there 3000 on the housing waiting list in
Reigate and virtually all surrey councils.
Who are you kidding!
peter, west sussex,
Too much common sense for a labour government. He should surely realise that the only good job is a government job. I am sure that a need for subsidised housing will generate a few thousand jobs figuring out how to provide it.
Ian, Vancouver, Canada
Well, there is a housing crisis as far as my four children are concerned, for despite the fact that they are all working, none of them expect to be able to buy a house for decades, if ever. So if ordinary people can't buy houses, and the bulk of our residential housing stock is owned, then we have a housing crisis.
And for those born and bred in the country, who will never be able to live where they were brought up, there is clearly a housing crisis.
Remember. Not all of us live in London, or indeed, want to.
Jeremy Poynton, Frome, Somerset
At last, a well-thought out and factually based piece which states some much-needed home truths, not least of which is the extraordinarily British assumption of entitlement to owner-occupancy. No-one has an inviolable right to own their own home, and the entire so-called housing crisis is based on this false sense of entitlement on the part of almost everyone in Britain.
Robert Dewar, High Wycombe,
Brilliant! I 'm a property developer - and its good to see someone can see the bigger picture and has the coiurage to say so in a well developed, well thought out article based on FACTS - not soundbites and assumptions. I agree with many of the points made and can't disagree on any.
aaron, manchester,
Simon Jenkins, you are totally out of touch. I'm sure average house prices of £300,000 in a few years will be ok for you but for most British people this is completely unreachable. There is a crisis it's just that it has no effect on people like you.
Will H, London, UK
If the government must build more houses on green fields, please let them do so on green fields around stations first (say, in a 500 metre radius).
Take a look down every railway line from London outside the M25 (say, Crowborough, Edenbridge - both stations - Tunbridge Wells to Crowhurst, Knockholt and Dunton Green, etc). Stations in almost all except the very biggest conurbations are on the edges or towns or villages - some are almost in the middle of nowhere.
You could fit 500,000+ decent sized houses and flats in total in such places without annoying too many people. The location would mean ready-made public transport links for the new homes (a rarity - most new homes are built well away from public transport) and reinvigorated public transport for the existing locals, as well as more support for local services, too.
Can I have a lucrative job advising Gordon Brown on housing now, please?
GB, Bromley, UK
No crisis ? You simply want to ring fence the countryside. A civilised country would look at the millions of acres o beautiful countryside and build well planned communities there - why not give every body a lovely home - wonder how you would like being compelled through no fault of your own to live in inner city Wolverhampton ? Have you ever even been there ?
One day these things will come back and wreak devastation on you and your sort - if we were starting from a blank piece of paper surely all could live somewhere pleasant to be.
And ask my daughter and new born son if theres no house crisis - living together with 2 sisters in a room 2m by 4m in our house, her paertner living 5 miles away.
Sometimes you people amaze me
terry, bewdley, england
Gordon Brown's unreformed socialist instincts coming to the fore as he trumpets the kind of solution that even the soviets eventually abandoned as being hopeless.
In general Mr Jenkins makes a number of perfectly valid points, the main ones being the desirability of a sizeable rental sector to encourage mobility, to reclaim brown field sites (not peoples gardens, but facotris and other waste lands) and this away from the south East.
The idea that the government should intervene in the housing market as a player is quite grotesque.
What is required are SENSIBLE planning laws, based on local requirements and preferences.
The views expressed elsewhere in these postings that high house prices are somehow due to hedgefund managers' bonuses - utter twaddle. This is much more to do with general asset price inflation which has being going on for some years for which the blame lies squarely with the former chancellor of the exchequer and his appalling spendthrift policies.
cuffleyburgers, lucca,
Some the high costs of buying a new house are government inflicted: stamp duty, planning fees, consultation costs, builders having to provide up to 40% 'affordable' houses, section 106 payments towards infrastructure, which used to be paid through taxation and maybe a planning gain supplement to be paid by the landowner. All this is loaded onto the cost of a new house.
Peter York, Tonbridge, Kent
Word on the street in a poor area of one large town on the M40 30 miles north of London is that young mum and baby can get council housing, then move back to live with parents and let the house - 'no one from the council ever comes to check, like they used to'.
Much more detailed analysis of this issue is needed.
And, if Mr J is correct, why are not the Tories making it their policy to identify and refurbish existing unoccupied properties and get them back to use? Why are the Tories so deeply .... flaccid, unimaginative, always slipstreaming Labout?
Jake, Oxford, UK
The crucial figure is £150,000. When the price of a no-bedroom/studio flat exceeds that price, then the children of the middle classes will not be able to buy anything at all.(assuming graduation salary of £25K, mortgage of 4xsalary, two kids per middle-class family, and parent's lifetime disposable savings of £100K, so that's gifts of £50K per child for deposit from parents. £50K + 4x£25K = £150K).
Studio flats within a 40 mile radius of the centre of London will bust through that price within 3-4 years (assuming 10% rise pa and current average studio flat price within that area of about £110000)
So by 2010/11, no middle-class child within a 40 mile radius of St. Paul's will be able to buy anything, anywhere to live.
And since if you fall off the ladder at the beginning, you never get back on (prices are rising faster than incomes, remember), that means it's forever.
Welcome to the 21st century.
Timothy Martyn, Southampton, Britain
As an observer, I agree with the author that the best way is to make a plan now and decide where and how to build. If you just let the developers build as they wish, it might provide more housing but it will turn out to be an ugly mess like in many suburbs here. In contrast take a look at Portland OR that has a plan for building and is admired for it's liveablity. Or even take a look at the design of Savannah, GA where the early British settlers laid out the city in an orderly fashion with lots of parks.
So build more, sure, but keep a tight rein on the developers. And if all else fails, you can all move here. We have more open space than we know what to do with.
Claudia , Atlanta, USA
The true iron clenched fist of Brown,and the photos of old
Scottish tenement buildings plus the souless housing in Eastern Europe, Bratislava is one good example of why this
government has learned nothing, and never will.
Well done Mr Jenkins, good stuff.
maggie snook, wool, wareham, Dorset UK
Agree with Toby, Suffolk and many other commentators: Simon Jenkins is , per his trademark, lambasting politicians for housing issues, preferring to let "the market" play it´s part.
However, it is the ever increasing disparity of incomes, festered by huge salary differentials and pay-outs, often little taxed , as is the case with off -shore taxed tycoons, hedge funds, private equity, that has made house-ownership so unequal. Many new and existing developments are purchased initially for speculation, and only after a handsome turn sold to a genuine home purchaser. Only if and when the U.K. relinquishes its obsession with being a haven for the very priviledged , even more so than Monaco, without realising the huge social fabric cost of such folly, will a greater sense of fairness, housing or otherwise, re-emerge.
Crista Lyon, Chislehurst, Kent
Quite right to point out the huge number of empties (to which we should add the under-occupied grannies-in-4-bed-detacheds). The investment motive is tops, but where is the equity coming from? Scarcity, through planning, but also the inevitable limit on land space. Remember, it is not *house* prices going up, it's *land* prices, stupid (because of limited supply).
To curb 'house' prices at little more cost to the home-owner than today's tax take on CT - Council Tax, stamp duty, IHT and CTT could all be replaced by a tax on land values. Then the purchase price of a house could drop in London to one-fifth of present levels, but the ownership costs would remain higher throughout the owner's lifetime. Good news for 1st time buyers, bad news for my-house-is-my-pension wallahs.
Conall, Margam, Wales
Densities are low?!
Has this guy ever ventured out of england? I live in a *detached* house and can literally hear my neighbours snoring. If densities were any higher id be able to touch both neighbours properties at once. Presumably the writer likes living in a rabbit hutch.
Gordon, Cambridge,
Will the gentleman who castigated the greedy property developers in the State of Florida please send them over here on the next plane? The median salary in Florida is $41, 171 pa(call it £20,000 plus change). You can get a nice 2 bedroom apartment (with pool!) in Sausolito for £79,000. Four times the median salary in the South East of England will get you a studio flat in a rough area with no parking space, garden or bedroom. And possibly no kitchen. So please, pretty please, send those greedy property speculators here. We need them. Because although we have lovely scenery, lots of pretty birds a-twittering, lambs a-gambolling, and a landscape that makes Simon want to hum Elgar all the live long day, we're a bit short of those funny things with roofs and green bits of earth out the back that the rest of the world seems able to provide.
Timothy Martyn, Southampton, Britain
The rental market has been fluid but is dependant upon two things. 1. the ability of landlords to secure a return that covers their costs and 2. relative flexibility untrammelled by paralysing regulation. The first is under pressure from high interest rates and the second from legislation such as Energy Performance Certificates (estimated cost £600 each) which aren't just a requirement of the ludicrous Home Information Packs but will soon be required before a property can be let. The government wants these to be valid for just THREE MONTHS!
The pack of idiots running the country are Hell bent on imposing legislation that exceeds the EU requirement for an energy certificate no more than once every TEN YEARS.
The reason for the draconian UK proposals is predictable use of the smokescreen of carbon virtuousness as a basis for yet more taxation. A bit like speed cameras which seem a good thing but in reality have little impact on road accidents. But boy, do they rake in money.
ian, bristol,
At last, a journalist that realises that Owner Occupation (OO) is subsidised and rentals are an efficient form of housing.
Add this one to your list - efforts to make renting cheaper, would result in cheaper house prices by way of lower rents funding lower mortgages and lower rent being an alternative to expensive OO mortgages.
There is genius in seeking to remove the duductibility of mortgage interest from BTL, rents would rise dramatically, making housing look cheap again, only to see housing rise again for lack of a cheaper alternative, exactly what the activists don't want, yet would encourage through flawed judgement. Yet Brown would be voted in again as people would love the ka-ching of their HP's rising!
TTRTR, London,
Simon
Do you reckon the media has some responsibility in creating the largest investment bubble in recent history?
Michele, Richmond,
I assume that Simon Jenkins earns substantially more than the "average" wage of £24,000. I wonder if he's considered the fact that in many area's of the country affordable housing is a myth and a person earning the average wage, even with a substantial deposit the top mortgage you can access is around £100,000. This will buy you pretty much nothing, a sharp contrast to thirty years ago when a single person earning the average wage could afford property through out most of the country. We are creating a society where property ownership will become an elitist trait. Is this what we want for future generations of Brits?
Toby, Suffolk,
a good criticle look at Housing today, its easy to state there is no crisis when writing from your study which is your fourth bedroom.
You critic misses out, that many people have no/limited amounts of security of tenancy.
A vast amount of tenants believe they have tenancies when in fact they are tolerated trespassers. (L&Q V Ansell 2007).
A vast amount of new homes are being built,discussion should be around quality not quantity as many surveyours believe the prewar parker norris will outlive modern homes.
Concentrating on affordable for those, analsed as voters may be a good political spin. However society should still find a solution to schemes with risk, such as longterm tenancies with floating support for mental health issues. However in the recent market developers competing with RSLs with the needs for sweating assetts, more take up of loans against less grant will lead to less supporting vulnerable people and more chasing profit and Middle England Voters.
Steve, London, England
So Mr Brown is set on carving up prime chunks of best agricultural landfor building homes on. What promises will he be giving landowners
I wonder. No where seems safe from further deluges that have already affected our big cities recently, it seems to me that we are all at risk whether we have small rivers, major rivers, soggy fields, hillsides or concreted flood plains sitting next to our rural/urban landscapes.
Gordon Ghetto , what are you thinking of? Get rid of your top heavy government departments, and release these as living accommodation for essential workers, half the problem solved at a stroke! Of course the stress of the Olympics will put huge demands on accommodation needs, a cover up there I fear! Perhaps a plot to move half of London out to the suburbs, the very idea!
maggie snook, wool, wareham, Dorset UK
'Preservation of rural England' is the blight of this country. Retired middle-class self-protectionists in linen jackets and straw hats roaming about like Fotherington-Thomas saying 'Hello trees.' Hello sky.', when what they mean is 'Got to keep the lower classes away from our paddocks don't-you-know Marcia.' Planning Permission is almost entirely controlled by such people, who band together in ugly, loud cabals to object to any building, of any sort, anywhere. And what use has it all been? We still have the ugliest, dirtiest country in Europe in spite of it all.
eric campbell, harrogate, uk
The main problem with the housing market is that housing is just too good an investment. The prospect of a large profit free of capital gains tax is, particularly after Gordon Brown's destruction of the pension system, just too good to miss.
It's also highly regressive - the rich make much larger tax-free profits than the poor, and the very poor, who can't afford to buy a house, make no profits at all.
The government should therefore remove the exemption from CGT on the profit from house sales. This would make housing a much less attractive investment, and divert some of the billions tied up in housing into more productive areas of the economy.
Michael, Blackburn, UK
Tim Myers, Worcester - it's some what narrow minded to say that the housing situation is more critical in the south don't you think? I was raised in the south but now reside in the North-East, a beautiful area of the country - I bought my first apartment (note I say apartment) a month ago and due to such dire house pricing, it cost me £140k!! I'll have you know the transport is as good in the north as the south, take for example the traffic saving trams in Manchester and the trustworthy metro system in Newcastle. Affordability is critical across the entire country and there are not always jobs down south either hence why people move all over for a decent job. "Obvious really" don't you think Tim??
What's actually obvious is that you live near a city where house prices are ridiculously out of proportion to the rest of the country - that doesn't mean however that your area of the country is worth more change than the rest of us.
Louise, Newcastle upon Tyne, UK
a good criticle look at Housing today, its easy to state there is no crisis when writing from your study which is your fourth bedroom.
You critic misses out, that many people have no/limited amounts of security of tenancy.
A vast amount of tenants believe they have tenancies when in fact they are tolerated trespassers. (L&Q V Ansell 2007).
A vast amount of new homes are being built,discussion should be around quality not quantity as many surveyours believe the prewar parker norris will outlive modern homes.
Consentrating on affordable for those, analsed as voters may be a good political spin. However society should still find a solution to schemes with risk, such as longterm tenancies with floating support for mental health issues. However in the recent market developers competing with RSLs with the needs for sweating assetts, more take up of loans against less grant will lead to less supporting vulnerable people and more chasing profit and Middle England Voters.
Steve, London, England
Agreed on all counts. State interference in supply and pricing in a market such as UK housing, is a sure way of creating little shocks to the market that will be exploited fully, by those in the know and not those it is intended to help. All will suffer eventually from depressed prices and falling confidence if it is expected that subsidised housing could always be built in well demanded areas. Defining key workers is also legally dubious, why should soemone who chose to be a teacher before the subject of key workers arose was built into their choice of career be any more deserving of a subsidy than an engineer, or a lawyer, or a shop worker? Are they on a higher moral plane than the rest of us, are they really more entitled to a subsidy than a charity worker, of course not. Let market forces do their thing, even if it means people have to move if they're so keen to buy a new home. I'm happy renting in the best part of the country in my opinion.
James, Tunbridge Wells,
"Only in the past two years (of cyclical boom) have houses caught up with the 10-times rise in equities since 1980."
However most people don't buy a house with cash early in life. The relevant figure is the difference between returns in the stock market and early repayment of debt.
Then of course you live in a house. Shares in Hilton won't give you a free hotel room.
Malcolm McLean, Bradford, UK
Great article. Blows the lid of the so called 'housing crisis'. Like most crisis they are a delusion and self-inflicted.
John, Reading,
"I'd happily live in a flat and use up less space than a house *IF* the builders of new properties would use decent soundproofing."
Me too! And why not make flats kid-friendly? Make courtyards with playing equipment. No wonder flats are empty when so many of them don't allow kids.
I'd love to live in a nice flat, it's nice to have a view, rather than to look at the grey terraces on the other side of the road.
"As a tenant, I was given notice in one house for asking for a gas safety certificate."
Ah yes. My landlord shut off the gas when he had to bother with one of those. Now I've only got a single electric heater to heat the whole (uninsulated) house.
starling, Lancaster,
Very interesting article. You've actually made me think about this in a different light. There is a development at South Cerney that was formally lots of old quarry's. They have turned that around - the old quarry's are now beautiful lakes surrounded by wildlife, trees, activities for the family and scenic walks. Ironically, 100's of houses have been built but for some astounding reason the properties can only be sold as second homes and occupied for 10 months of the year. The properties are in a desirable location and yet people aren't being aloud to live there properly - and yet it is declared that there is a housing shortage.
Furthermore, I can't understand why they don't do the same sort of thing as this Quarry site with other brown field sites - at the end of the day the reason people like the 'nice' areas are because there is a good community spirit, good facilities and it looks nice. Surely its better for Britains culture, if anything, to create those sort of environments.
Amanda, Gloucestershire,
I have often thought that the experiences of warfare were probably a reason why so many people prefer to rent in Germany, so its not really a good comparison.
As buy to let is a business, clearly mortgage interest is tax deductible. Don't even contemplate changing that principal or before you know it some Chancellor will deny that cost to every business and squander the money while destroying private sector jobs.
Access to council housing has been rationed for as long as I can remember by waiting lists and points systems. A private rental and O O system permits labour mobility which is also essential for economic efficiency.
The rising cost of houses over recent years is a bubble. It is irrational. There is virtually no increase in population in Scotland yet prices have more than doubled everywhere in the last five years. I expect it to end in tears and people crying for state help or compensation from banks which lent them too much.
David Bell, Larkhall, UK
To cover a couple of points:
To take the comment that there is nothing exceptional about current housing costs: First time buyers may only be spending 17% of their income on mortgage *interest* payments - but today's typical first time buyer earns 140% of the national median wage, compared to 108% in 1998 - I leave readers to dig through ddata supplied byt the Council of Mortgage Lenders & the Office of National Statistics.
And my second point about why people so keen to own their own properties? I suggest you compare the security of tenure offered to German tenants to that offered to UK tenants. I can be evicted with two months notice, how long would it take to get a German tenant out? If you want renting to be seen as an equal alternative to buying then tenants must have more security.
Guy Montag, Durham,
Am I the only one who's noticed that Simon's counting 300,000 *unbuilt* houses in his tally? I think his argument goes "Well, there can't be a housing shortgage because there are lots of homes that don't actually exist yet, but if we count these non-existent homes, well heck, the problem goes away". What are we going to do next? Include accommodation in Narnia? "Well, if that nice Aslan gives us a field, well, that's squillions-billions more non-existent houses". Give me strength...
Timothy Martyn, Southampton, Britain
All I can say is that developlment for housing, businesses and other reasons must adhere to sustainable development. Progress and development are okay if they do not displace wildlife species and the areas ecosystems and biodiversity. The State of Florida in the US has decimated its nature havens to placate greedy residential developers. The UK can do better.
Brien Comerford, Glenview, United States
I grow tired of people who own large houses in the South East telling the rest of us that small flats with no gardens is all we can aspire to. But my fatigue at Simon's "the South East should be a pretty garden and all the untidy plebs should just run orf" is neither here nor there. So let's just consider one thing: Simon's statement that farmers should be subsidised to maintain unproductive agricultural land in a pretty condition. It's a point of view. My point of view is that all such subsidy should cease, and any farmers who cannot then upkeep their land should be free to sell it to housebuilders who will then do something productive with it. Simon's view costs a lot of public money, skews the house market, but at least provides him with a pleasing landscape. My view creates wealth, costs the public purse nothing and even though the view is not so pretty, at least enables people to have a window to look out of. Whaddya say, Simon? Put it to the public vote? Whod'ya'd think win?
Timothy Martyn, Southampton, Britain
BRAVO!!
S, Hampshire, GB
Thanks heaven's for sanity at last. 700,000 houses empty, land available for another 300,000 and the problem is a housing shortage ??
Quite right Mr Jenkins.
If we want lower cost house then stop banks lending six times incomes and the price will be lower.
If banks keep lending six times income all the extra housing isnt going to affect price.
M Reid, Northampton, UK
Absolutely spot on. In addition to his point about villagers wanting a preferential right to buy in their birth place - isn't it true that his fellow villagers are the ones who are selling to out of towners in the first place? Maybe they should subside their younger counterparts first forray into the local property market out of the profitls they have made by selling property to non-villagers. At the end of the day it's their choice and they seem as much driven by profit and economics as those in the city when it come to selling houses. It's a nice sentiment but come on we live in a capitalist country.
Peter Bell, Eailing, UK
Very well reasoned & good argument.
Certainty is vital. In our case we have the possibility of a second runway at Gatwick which is affecting decision making for families & businesses. That possibility cannot be settled until major work is agreed or denied at Heathrow & Stanstead.
This should be an interesting debate & it would be good to see a politician respond in this Forum.
Jeremy, Crawley,
http://www.policyexchange.org.uk/Issues/Housing.aspx
House prices are high because land is artificially made scarce through the planning system in Britain. Simon Jenkins goes through an awful lot of contortions to try to deny this basic economic fact.
It doesn't matter whether people rent or buy, they still live somewhere. What matters is how much living space they've got, and what kind of living space. What people want is detached houses with gardens, what's getting built is flats.
Every single of Simon Jenkins' points is thoroughly rebutted in the above report.
Heiko Gerhauser, West Bromwich,
I'd happily live in a flat and use up less space than a house *IF* the builders of new properties would use decent soundproofing. My life has been wrecked by noisy neighbours, not all of them deliberately loud, but thin walls make for too many sleepless nights listening to slamming doors. Hence it's an old semi for me thanks until developers actually start concentrating on quality and giving buyers what they want, rather than concentrating on their profit margins.
Grumpyinsomniac, Manchester,
If the government decided how many shoes Britons needed, there would always be a waiting list for shoes, and a points system for preference towards those with fashionable impediments or political lobbying skills. This is what happens with health care, why is it a surprise that housing is any different. The idea that the state can control what an individual may build or demolish on his/her private property means that there is no market in property, there is only subjection to the arbitrary whim of the state. The losers are the as ever the poorest.
1skeptic, london,
It makes no sense to concentrate housing development in the midlands and the north. Housing stock here is already relativley 'reasonably' priced and readily available. Housing development needs to be concentrated in the south east where the greatest demand is, where the jobs are, where there is plenty of space, where the transport infrastructure is best and where affordability is most critical. Obvious really.
Tim Myers, Worcester,
Simon Jenkins - the voice of reason. I can understand why doesn't the government grasp this nettle firmly and rationally? They could start by moving civil servants and their offices out of London. I don't mean to existing cities, but to the sites of new housing and new towns. In the age of broadband, do they all really need to huddle together in huge London offices?
SarahN, London, UK
what tosh! "There is no housing “needâ€, . . .just housing demand and housing supply." Naive in its simplicity and in ignoring that supply is controled by inefficient planning processes and greedy buy-to-let or buy-to-invest speculators, together with a financial sector fuelling over-borrowing. I assume Simon Jenkins has no children who can't get on the "ladder", or are on it with a 6 times salary millstone around their necks. Why do you think so many 20s and 30s are still living with their parents? This is one area society has a place to manage the population from being ripped-off.
Graham Coleman, Portsmouth, UK
This sounds far too sensible for the government to actually do it, but we can live in hope! Provision of more amenities for teenagers should also be part of the mix - this would both directly and indirectly increase quality of living in an urban area, and hence encourage houses to spring up there.
Richard Milne, Edinburgh, UK
One of most informed articles I have (ever) read on the subject.
The PM's 'special advisers' could do worse than not to read this. Even if Simon may not be as left wing as some would like he is clearly against the pointless self-shooting the 'new' government's housing in both feet.
As a professional in the field for at the last 14 years I cannot but agree with practically everything said.
A London local government. 60-yoa chartered town planner , architect and (housing) project manager.
Nicholas Xenakis, The Borough, London, England
The treasury formula for economic stability (inflation) excluded house price inflation. The brakes should have gone on at least 2 - 3 years ago. With full employment , high house prices, a very successful economic cycle had been achieved. No he just kept on going, more and more growth, fed by importing labour. Gordan said 'stop go, boom bust, high inflation were a thing of the past and he believed it.
Hang on though what about house prices, Gordan knows he has messed up, He now thinks he can correct this market distortion.
Oh by the way you forgot to mention demographics, by 2020 we were looking at a collapse of property values, due to over supply.
PETER MACE, Eastbourne, England
As long as your alright - let the rest eat cake...
Dan, London,
Perhaps it might be just semantics, but the British 'housing crisis' is a pecking order panic, or a social mobility crisis and these certainly do exist.
True, the youth should feel no shame for sharing rented accommodation, or even bedsits, but house price rises are such that their parents fear for their offspring's' ability to ever afford something to call their own, lest they remain on the bottom rung on the lowliest of social ladders. Being financially bled, in return for dodgy accommodation by the vastly wealthier who can afford to pay crazy prices. This is the market forces you seem to support.
Even lowlier than not affording foreign holidays or personal transport, would be the 40 something year old eking out an existence form a bedsit, rather than foolishly pay another's entire mortgage. Maybe, with frugal bedsits' savings, by the time he's 90 he'll have saved enough for a decent down payment.
Housing crisis -- Loneliness!
P.J., West Vlaanderen, Belgium
I am an American who visits and loves England. We have the same pressures here in central Kentucky. The main reason to visit here is to see the rolling horse country, but the developers want to buy it and develop it to the point where no one will come see it. Policies in England and the US should be designed to encourage young people to get an education and to work and save and earn the right to have a nice home without government (read tax money taken from others) subsidies.
Bill Newman, Georgetown, KY, USA
I would really like to see the true life-cycle cost of public housing built in the UK in the last phase of post-war socialist madness.
My impression is that a large part of it was ghettoised, vandalised & destroyed by the tenants. Thus resulting in Mrs Thatchers successful policy which might be summed up as '' give it free to any tenant who will rid the state of the cost of maintaining it. Dynamite the rest & hand the Land to independent housing associations with no recourse to the State.''.
Under old-Labour Brownites ...here we go again, tax payers take cover!
J Barkham, Burton -on - Trent, East Staffs
"There is no housing crisis. There is just a housing market. There is no housing “needâ€, unless you are sleeping in the street. There is just housing demand and housing supply."
Just because you have attempted to describe the problem in simple economic terms does not necessarily do away with the problem. If people were going hungry, due to food shortages and too high prices, placing the problem in economic terms would not mean that there is not a food shortage (or crisis if you like).
If you are unable to see the benefits of affordable basic necessities for the general population then I believe that you are not in touch with reality and the views of most reasonably minded people. Have a cheap shot at socialism, but creating bigger gaps in wealth and denying decent living standards for the general population does not create decent society.
Why do you then continue to suggest so many solutions for this problem that does not exist? The most bizarre article for a long time
Mike Bamber, Bristol, UK
I wish Simon Jenkins would get off the 'overpaid public sector' bandwagon. I work for the public sector and I can assure him that those of us who actually do the work, rather than take credit for it, are hugely underpaid; those of us who work in London are particularly badly off and are finding it increasingly hard to be able to afford to live. My mortgage takes over half my monthly salary and I am far from being alone in this. Our pay has not kept pace with inflation for years without count, and the people who are supposed to represent us instead do the exact opposite. Many authorities sold off their housing stock, part of which used to be used to house their employees, in the early 90s just before the market boomed. They lost huge sums of money and local authority employees lost their access to affordable housing. The result of this has been felt by firefighters and nurses most noticeably who now travel huge distances to work, but also by the rest of us.
Gladiatrix, London, England
Simple, efficient, ultimately sensible open market policies and therefore impossible in this inefficient, party-squabbling age. Hong Kong and Singapore would operate in this way; the benefits of autocracy.
Tee Inchina, Macau,
To rent a former L.A. one bedroom flat, of modest proportions "sold by Thatcher &Blair", in Batersea, is costing me £866 per calender month. In Holloway, Brixton, Streatham or Peckham it is the same!
I am not after your money Mr Jenkins, just an end to this robbery on a indecent scale, but than you probably admire "the great by-gone era's", like the victorian, and their clear separation of the upper crust from the rest of us loosers.
Why don't you ask in Germany say, or France the average rents, or indeed the whole concept of the"market", and see how far you get!
Oh, and yes I know I could buy and get myself mortgaged to the hilt for a barely passable living space, but I will not!
And who would your buy to let friends scrounge off, if I and the rest of us did all buy?
Jondi, London,
Jimmy from Ipswich, I understand where you come from completely. I am too after a stable rented home and they don't exist from the private market. The privately let home is susceptable to a 2 month notice, yes, you can be out on your ear looking for another property within 2 months. Trying to find one that fits your circumstances is a challenge enough.
I am not on a coucil housing list, they don't exist in Leeds. I am classed instead as general needs, which everyone is in Leeds unless you are living in a hostel. This means you stand no chance of getting a stable rented home.
Bonsaka, Leeds,
How about making property owners pay council tax, rather than tenants no matter the 'situation' of the property. Councils and Housing associations to be exempted. Could force a change in attitude from those who own empty homes as well as bringing in extra money for councils...
cww, Ipswich,
I don't usually agree with Simon but I think he's got it right on this one.
Ian, Bristol,
Fred in Dubai commented that "Life is for living, not owning things". Fred, firstly I need to point out that most people will not have pensions big enough to pay rent when they retire, so they need to buy accommodation or face penury in retirement. So if they don't own at least one thing (their home) they'll be eating out of cold soup cans when they're 70. Which isn't living unless you *really* like cold soup. Secondly, you live in Dubai. The goodness or otherwise of private-sector rental accommodation in the Middle East is, while no doubt fascinating, not perhaps entirely germane to this article?
Timothy Martyn, Southampton, Britain
One of the problems with the supply of affordable housing, to rent or to buy in the UK, is that tenants of private, as opposed to social landlords, have no real security of tenure. This means that it is necessary, if you can afford it, to own your own home. If you can't afford to own your home, you will probably try to obtain social housing. The difference between the UK and other European countries, where tenants have some security, is reflected in the number of owner occupiers.
This puts immense pressure on the housing market, for starter homes, and on social housing.
There is a problem. If you are low/medium waged, the difficulty of trying to buy or rent a property in an area like London is substantial. You cannot buy a studio flat in North London for under £140,000. Even on an average salary, this is unaffordable. And raising the deposit and first month's rent on private accommodation is very difficult.
I am really surprised that Simon Jenkins does not consider this a problem
Dana, London,
Excellent article...missed out on overloose lending by banks which has driven the house price boom in last few years...the withdrawl of which is now begginning the inevitable house price crash.
Al greenspan, Cardiff,
The housing market is fast falling into the hands of the conveyor belt. The average multinational developer won’t get out of his helicopter for anything less than estates of three hundred dwellings at least. You just cannot trust the industry. There may have been a time when we would look at what was being built and thought that the sacrifice of virgin land had not been in vein. But the record of house building has been awful with all sorts of boxes built all over the place, their lack of character and forethought that much more noticeable by the huge numbers that take root in any one development. Is it not more carbon friendly to live in the town? To use existing houses even if they need modernising? A terrace of old houses could be transformed if a few in the row were knocked down to provide green space or off street parking while the rest are modernised. Out of town means loss of country, more petrol, flood; bio-fuels will cause food scarcity, countryside is now a strategic asset.
Malcolm Turner, Alsager, England
The crisis is one of housing affordabilty. There is never a supply crisis in a free market as the price changes to reflect this. Oil crisis? What oil crisis?
Don't start quoting average wages either. Under 30's with families are on well below average incomes with little or no disposable income. This is largely due to the affluent elderly and greedy developers using things like housing and propery investments to feather their own beds.
Andrew, Yorkshire,
After living in Texas for 5 years I came to appreciate their property tax system. It's very simple -- everyone pays taxes as a proportion (about 2%) of the value of their house or houses. Its very low on paper work and it's hard for people to cheat: If you are rich enough to live in a fancy house then your rich enough to pay the tax on it. It certainly discourages people from using building plots as a low tax investment. 2% seem very high but there is zero state income tax to compensate (can't ever see that situation in the UK, unfortunately)
EH, Strood, Kent
My blood ran cold when I heard the Government announce that more 'social housing' was needed and that local Councils should be involved in supplying it. Have we learned nothing from the post-war housing estates? We are already seeing signs of this 'build now think later' attitude to housing in the soulless blocks of flats that seem to be springing up on any vacant piece of land. Herding people of one socio-economic class into 'affordable housing' is the sure-fire way to perpetuate the social divide that, with the huge and growing inequity of salaries, is becoming a yawning abyss. Salaries have to increase so that a sensible ratio between reward for different jobs can once more be created. Far from building more look-alike flats and houses, local authorities should buy 'ordinary' houses at the market rate and then make them available for rent. The one thing that would change attitudes to renting is the re-introduction of security of tenure and rent regulation by a rent officer.
Alice J McCabe, Doncaster,
a straight forward review and reorganization of the house market in the uk would solve so many problems.
Having spend a few years overseas and bought and sold property I can recommend a close look at the West Australian system (not to be confused with any of the other Australian states), it really works ! adopt that without modification and the housing supply problems would ease dramatically 4 weeks is all that’s needed in many cases from offer to exchange. Thus taking up some of the slack.
Also the problems of gazumping, straight forward indecision and greed are removed. If you offer on a house and the conditions are met you have bough it.
D Court, Birmingham, UK
Clearly what is needed is a sound planning process. I remember a number of years ago a major retailer wanted to build a distribution hub where I live. They were refused planning permission due to the site being Greenfield. However when they identified a site only a couple of miles away on a brownfield site planning permission was denied due to the weight of traffic it would bring into the town. Can't build outside the town, can't build inside.The sooner the clowns with their own agenda are removed from the planning process the better.
Kev, St Helens,
mr jenkins - You say, on the one hand, that we should be concentrating development in 'previously developed urban areas', but then also want to protect historic buildings and the character of the area around them, and strongly oppose new tall buildings in the city of london. Following your logic, the only houses that will ever get built in this country are on heavily contaminated and potentially dangerous sites, like former coalfields, steel mills, and landfill sites. Hardly good for health, or the environment. Oh, of course. We dont actually need any more houses. Stupid me.
neil, london,
Excellent article Mr Jenkins. An Eye opener. I have to admit I have been somewhat blinded by headlines on occasions to think there is a serious housing crisis, but as you say in your article there is plenty of unused land and empty homes (especially in Northern cities) which could be used if properly planned with appropriate policies and incentives to reuse those areas. Perhaps the government, now that they have all but scrapped the East Manchester super-casino idea, should give that money to Manchester city council to redevelop that area with new housing WITH the appropriate infrastructure and new forms of job creation (ie. don't just build blocks of flats - build other facilities as well so that it doesn't just turn into a sleeper area)
Max, Manchester, UK
Go to Margate in Kent and you will see houses that have stood empty for 20-years.Build more apartments for rent with laws and regulations protecting both landlord and tenant and that are strictly enforced. I have never owned a house in my life and have no wish to. I have always rented and up-till-now have always had good landlords. Most people are still aftraid of Rachmanism and are forced to buy. Life is for living not owning thinngs.
Fred, Dubai, Dubai
Tosh & Twaddle,
I would like to rent a council house , I am on the council list , it will be years and years before I will get far enough up the list to get one.
So I rent privately, from a landlord who reacts to 'market' prices and so increases the rent as often as is possible, there is little security, less maintainance, Are councils building more houses - err nope, can they retain existing stock under 'right to buy ', no ,,
I would like to rent somewhere that will give me some stabilty, I cant afford a mortgage , too old and lowish wages, I cant move oop north due to family committments , so here I am stuck in the east of england , renting privatley,,, waiting ...
Build some more - lots more council houses please
and stop calling it social housing .. call it renting from the council .. I dont mind paying a proper rent , just give me some stability.
Jimmy , Ipswich , Suffolk Gulag
Planning policy is the problem, not the solution. If you assume that a house lasts, on average, 100 years, then we need to replace one percent of our stock every year just to stand still. This takes no account of our rising population or shrinking household size. We have not figure once in the last 20 years. With demand continuing to rise, the last decade has seen the lowest level of housing starts since the war. A disproportionate number of those were flats not houses. Simon Jenkins can fulminate all he likes about how it is the developers' fault, but they want to build houses and people want to buy them The fault is with governments and local authorities. Questions of buying and renting are not germane. If there are not enough houses you cannot buy OR rent them.
Quentin Langley, Woking, UK
At last, a journalist that realises that Owner Occupation (OO) is subsidised and rentals are an efficient form of housing.
Add this one to your list - efforts to make renting cheaper, would result in cheaper house prices by way of lower rents funding lower mortgages and lower rent being an alternative to expensive OO mortgages.
There is genius in seeking to remove the duductibility of mortgage interest from BTL, rents would rise dramatically, making housing look cheap again, only to see housing rise again for lack of a cheaper alternative, exactly what the activists don't want, yet would encourage through flawed judgement. Yet Brown would be voted in again as people would love the ka-ching of their HP's rising!
Matthew, London,
You refer to the bizarre “right†of country people to a subsidised house near where they were brought up.
Emotional attachment to a place is clearly something incomprehensible to you. In the Worcestershire village where I was born and grew up, the orchards, pond and farm at the bottom of the lane, which were my world as a child, have now been turned into executive housing for accountants and the like, and the prices are way beyond my pocket. One of the dwellings is now apparently owned by a London woman, who spend a few days there when she needs a change.
And by extension, one could also refer to the bizarre right of people to live in the country of their birth. There are cheap houses in Kazakhstan and Latvia. Why can’t young people buy there?
Trofim, Birmingham, UK
Dear Simon Jenkins, Re. Times article 15 July 2007 Current methods for assessing the impact of new development do not incorporate a monetary value to the loss of landscape. A study at Imperial College on "Contingent valuation of landscape (Proc. Instn Civ. Engnrs Transp., 1999, 135, Nov., 185-194) " indicated that, in the case of the Newbury bypass, landscape preservation benefits can be significant (e.g. £8.71-13.74 millions at 1996 prices). Non-use values comprise an important part of landscape valuation. It is likely that, in the future, with increasing scarcity, environmental goods such as landscape will be valued more highly. This will increase the need to adopt assessment techniques that consider loss of landscape. Hope this is helpful. Kind regards,
Dr. Gabriel Alexander Khoury, London, U.K.
Affordable housing has disappeared due to cheap and easy finance combined with the public's obsession with property as the best pension and safest way of investing for the future.
Housing policy has failed to provide the right incentives for building houses where the infrastructure already exists and making much better use of brownfield sites. As Simon Jenkins argues, there are many industrial wastelands that could easily be converted to residential areas as has already been proved in parts of the Midlands. There is really no need to suburbanise the countryside and encourage long distance commuting which are both highly damaging to the environment.
The myth of housing prosperity fostered by this Government is probably one of the main factors behind their re-election. The reality, however, is that house price inflation has distorted investment in the economy, exacerbated the indebtedeness of housebuyers and encouraged speculation in the housing market that could end in tears.
M.Roarty, Eastbourne, UK
The main driving force behind the explosion in house prices has been the orthodox, but mythical, perception that the value of property will never be lower in real terms than it is currently. It's the latest groundswell of popular irrationality last seen in the dot-com boom. And of course, in the short term, it's self-fulfilling. Millions of people have switched into property the investment of their on-going savings. Is there any general understanding that this is creating a bubble that must burst? Or indeed, any willingness to understand? Or am I wrong? Has there actually been a sea change that will ensure permanently low real interest rates - thereby maintaining the affordability of current property price levels? Or will the structural shift be to public acceptance of the cost of housing taking up a higher proportion of income than has been the case historically. It's hard to imagine how the correction can come from the income side, but surely it has to come from somewhere?
Simon Stephenson, Windermere, UK
All very well Mr Jenkins. But you have a large house in the countryside already. You have a vested interest in ensuring no more are built. Instead you would prefer people to be crammed into city centers. What a nasty aspiration to inflict on your fellow countrymen.
Andrew Jones, Cheltenham, Glos
An argument very well written and stated, unfortunately it is also extremely logical. Brown et al cannot operate on logic, they need the 'crisis' scenario so they can hoodwink the electorate into believing that NuLabour have saved the day!
Les, Southport, England
Wen you compare private rental rates in France, Germany and the UK you fail to mention that in Germany and France you have security of tenure. You can make you landlord keep your flat or house habitable without being thrown out.
As a tenant, I was given notice in one house for asking for a gas safety certificate. Of course the landlady also refused to return my deposit too.
The biggest driver of owner occupancy levels in the UK is that private renting is such a thoroughly miserable experience.
Richard , Sevenoaks, Kent
As you criticise Gordon Brown for postulating without providing evidence, perhaps you could have strengthened your argument by citing the sources of your data? Particularly as your figures are quite different to PWC's.
Why did you provide figures for median housing payments when mean would have provided a truer picture? Why did you choose last year's housing payments, ignoring the significant interest rate rises this year? Cherry picking data to support your arguments perhaps?
That said, some good points. In addition to the swathes of empty accommodation, demand has been also been driven by a fundamental social shift with many more people living alone.
Mark, Brighton,