Build, baby build –a government trapped in false consciousness!
- rpwills
- Sep 28
- 3 min read
Updated: Sep 29
The Government has announced in a MAGA style event at the Labour Party conference plans to build 12 new towns. A policy heralded some time ago. The assertion is that there is a housing shortage and building more houses is the answer.
The problem is that the government lacks understanding of the housing market and has fallen for the ‘we must build more houses’ mantra of the development lobby and associated free market lobby groups – incorrectly styled ‘think tanks’.
Context
The Government announced new housing targets on July 30th 2024. Overall the objective is for a total of 1.5 million over a four-year period or 375,000 per annum.
The vital question, ignored by commentators is do we need that level of housing growth? There is an assumption that we do, that it will result in cheaper housing and that all the current issues around need will be resolved. Yet the evidence suggests otherwise.
Each year more dwellings are built than the number of additional households. We have a surplus in England of 1.5 million dwellings, in Cornwall of 35,000 dwellings. Problems of affordability and poor quality housing will not be addressed by building more. There are policy options to deal with current problems including investment in updating existing properties, changing the mortgage market to assist first time buyers, changing the private rental market and providing support to renters. Its not a case of building more it’s a case of improving what we have and using the existing surplus.
Policy proposals
Where could the next new towns be?
The New Towns Taskforce has recommended 12 locations are taken forward by the government:
A standalone settlement in Adlington, Cheshire East
A corridor of development in South Gloucestershire, across Brabazon and the West Innovation
Arc
A development bringing together Chase Park and Crews Hill in Enfield, north London
Redevelopment of the former airbase at Heyford Park in Cherwell, Oxfordshire
An urban development in the South Bank area of Leeds
New homes in Victoria North, on the edge of Manchester city centre
A standalone settlement in Marlcombe, East Devon
A renewal of Milton Keynes city centre and an expansion of its periphery, alongside a new mass
transit system
Densified development in Plymouth
A new settlement in Tempsford, Bedfordshire
A riverside settlement in Thamesmead, south-east London
Expanded development around Worcestershire Parkway train station
[BBC news].
Conclusion
Increases in house prices can be largely attributed to their function as assets, where buyers/investors seek returns when interest rates are low and returns elsewhere are limited. Earnings also push up prices as people have more money to spend. There are then regional variations to consider, these arise from a combination of factors – people moving to an area with significantly greater resources than existing residents; competition with second home and holiday lets buyers. Increased competition may also arise if investors buy property in an area under buy to let, seeking to gain from the private rented market. At the same time access to resources for housing vary. Earnings levels vary considerably resulting in many households unable to ‘compete’ in the housing market. Changes in housing support levels, tighter controls for first time buyers and a more flexible labour market have all made it difficult for some households to afford rents or buy a property. The government is pursing a policy totally contrary to the evidence.
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Further reading
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