The Case for Housebuilding

The report was updated on 24th January 2023, shortly after publication, to correct discrepancies in some of the data.

• In recent months, housing has become an increasingly contentious issue
• A major new CPS report, ‘The Case for Housebuilding’, takes on and demolishes many of the most common myths about Britain’s housing crisis
• It shows that we have a massive shortfall in homes, especially compared to our neighbours, and that this has played a key role in driving up prices
• It explains why building solely on brownfield cannot deliver the homes we need, and shows that housebuilding is not as unpopular as is generally understood
• The report is endorsed by former Housing Secretaries Sajid Javid and Simon Clarke and by former Housing Ministers Brandon Lewis and Kit Malthouse

As public debate about the housing and planning system grows, a new report from the Centre for Policy Studies demolishes a series of longstanding and increasingly damaging myths about the British housing sector. It has received support from four former housing ministers – with Sajid Javid, Simon Clarke, Kit Malthouse and Brandon Lewis all giving the paper their backing.

‘The Case for Housebuilding’ by Alex Morton and Elizabeth Dunkley accepts that many of the criticisms of the housing sector are completely valid. But it takes aim at a series of myths that are helping to reduce support for much needed new homes. First, that Britain does not have a housing supply problem. Second, that increasing supply would do little to reduce the price of housing to affordable levels, because it is primarily driven by monetary factors. Third, that there is sufficient brownfield land that there is no need for greenfield development. And fourth, that building new houses is invariably unpopular.

The report notes:

• In the 1960s Britain built 3.6 million homes, while in the 2000s and 2010s we built around 1.5 million homes a decade, despite far higher population growth. 
• The size of new homes has fallen. Housing market changes introduced under Labour saw the proportion of flats being built rise hugely. The introduction of Help to Buy tilted the balance back, but the homes we are building are still smaller than the average house size for any country in Western Europe.
• Since the 1970s house prices have increased dramatically. In addition, prices have risen fastest where supply and demand are most imbalanced. In countries that built more, price rises have been far lower.
• Rents are also climbing as a share of income. Whereas private renters spent 10% of their income on housing from the 1960s to the 1980s, rising to 15% in London, the share of income spent on rent has risen to 30% in recent years, and almost 40% in London.
• Arguments that housebuilding is roughly keeping pace with new household formation are fundamentally flawed, as are claims that the enough houses can be delivered simply by building on brownfield land or building out existing planning permissions.
• Indeed, cities like London and Bristol could build just 24% of the homes they need over the next 15 years on currently existing brownfield sites. Most rural areas have almost no brownfield.

The report also urges politicians to stop assuming that new homes are unpopular or to worry that new homes might push down house prices. Voters overwhelmingly agree (81%) that the housing market is not working properly. On a national level, there is overwhelming support for a large number of new houses being built, and on a local level people support small or moderate numbers of homes being built in their area.

Elizabeth Dunkley, CPS researcher and co-author of the report, said:

‘Our report makes clear one simple, indisputable fact: that Britain needs to build more houses, in the places where people want them. To do otherwise is to court economic, social and increasingly political disaster.

‘The case for housebuilding is simple – without it Britain will be a less productive, less equal, less fair and less happy country. Building more homes is the clearest way to boost economic growth and rebuild our economy.’

 

Endorsing the report, Rt Hon Simon Clarke MP, former Secretary of State for Levelling Up, Housing and Communities, said:

‘This is a hugely important and timely paper which explodes many of the comforting myths around housebuilding – most notably that there is any realistic possibility of our building the homes we need on brownfield sites alone.

‘As we confront this great economic and social challenge, Alex Morton and Elizabeth Dunkley set out the practical, political and moral case for improving the supply of new homes, in a work which is as powerful as it is persuasive.’

Rt Hon Sajid Javid MP, former Secretary of State for Housing, Communities and Local Government, said:

‘For decades, we have simply not built enough homes. This failure risks creating a generation that without any capital of its own, becomes resentful of capitalism and capitalists. This important report presents a clear analysis of the core challenges we face, and how elected officials can and must rise to them.’

Rt Hon Brandon Lewis MP, former Housing Minister, said:

‘I firmly believe that the Conservative Party have always been the party of housing, recognising the importance of home ownership, as well as the enormous contributions the construction and housebuilding industry make towards our GDP. We must keep on building. Not only is this vitally important for our economy, we need to make sure we’re building houses for the next generation of homeowners.

‘We owe it to our children to ensure they can have the same opportunities as previous generations.’

Rt Hon Kit Malthouse MP, former Housing Minister, said:

‘We should all be concerned about where and how our children are going to live, but more than this, we also have a duty to give them the same or a better chance at home ownership as their parents and grandparents. We simply cannot do this without building millions of new homes and this important report powerfully underlines that moral and political imperative.’

Alex Morton - Monday, 23rd January, 2023