Why Britain doesn’t build

I find the economic reductionism in housing planning really irritating. It&#x27;s not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations.<p>What kind of state throws up it&#x27;s hands and claims &quot;it can&#x27;t&quot; fix housing when states can do precisely that?<p>Thatcher&#x27;s revolution in council housing is a cesspit of counterfactual outcomes. It made individual householders deliriously happy, enshrined them as Tory voters for decades and from shelter statistics left 1.5 million families functionally homeless. Millions live in penury, in squalid hotels because councils are disincentivised from fixing things, penalised even.<p>Australia&#x27;s housing crisis is just as bad. Truly sordid tropes about rent caps and freezes are trotted out again and again, as if simply reciting them makes them axioms: they&#x27;re not. All statements about effects on housing stocks are contextual and depend on other social policy, including (surprise surprise) building more rental homes by the state.<p>I&#x27;m a home-owner at the end of my working life. If I was a young person, this above all other things would radicalise me. Our elected leadership are captive to stupid market force arguments. I&#x27;d rather they tried and failed than sat on their hands.

I am in Indian immigrant living in the UK for past 5 years. The housing system here feels extremely stupid to me. They basically resell houses 100+ years old at 5% higher value every year. It&#x27;s kinda like gold or bitcoin, except those assets are actually very limited in number. But housing is simply artificially limited due to policies.<p>Total UK housing stock is worth 10T GBP vs 2.2T GBP GDP output. Don&#x27;t think any other country comes even close in terms of skewed reliance on housing as a driver of wealth. I can&#x27;t imagine the reduction in net worth of citizens (65% are owners) when house prices crash 20% due to higher interest rates. That would be 2T of the 10T value - almost the same as GDP.<p>Anecdotally, every British person I know has a common long term goal - save enough money for a 5-10% deposit on a mortgage. The incentives here are all wrong. You build wealth by investing in a house &amp; taking 90% loan to value mortgages instead of actually working harder. Work is just a means to save enough for deposit &amp; afford a mortgage premiums and maybe 1-2 holidays a year.<p>People complain UK is stagnating. Companies don&#x27;t want to IPO in London. I can tell why - banks don&#x27;t want to lend to SMEs. 50% of their lending is actually housing mortgages. Same with people - they would overwhelmingly invest in a house rather than own company shares. Housing is the root cause of malaise in the economy. Take away the incentives to own a house by building more homes, increasing mortgage rates and eliminating government policies helping people to buy &amp; this country would just become much better

There&#x27;s loads of houses being built in the UK (often of questionable quality, built for maximum profit, packed into minimal amounts of space).<p>It may still not be enough to match the demand, but the real problem is we don&#x27;t seem to be building any infrastructure to support these homes.<p>More people and more homes requires more roads, railways, hospitals, police stations, power stations, sewer capacity, even reservoirs, and lots more. And this rarely seems mentioned in discussions of the housing crisis or rising immigration. And as a nation we&#x27;re incapable of building infrastructure without cost and&#x2F;or timescale spiralling completely out of control. See HS2.

Like a lot of things in Britain there&#x27;s a chronic lack of development, and a &#x27;pass the buck&#x27; trend.<p>Our water infrastructure is another prime example. There&#x27;s been no real investment in decades and the system we have in place was designed for a population in the 1950s. As a result our reserves are woefully inadiquate, resulting in the annual &#x27;hose pipe ban&#x27;. The rhetoric around it has changed recently though. According to one of the water boards its &quot;because everyones working from home&quot;, ignoring the fact that we&#x27;ve had these issues long before the uptick in WFH.<p>Our electricity supply is just as bad, although this is one area thats getting a fair bit of private investment with offshore wind, but the lack of storage ability makes this useless at certain times of the year, resulting in situations like we had in late 2022 where old mothballed power stations had to be turned back on to meet demand.<p>Our housing issues are extremely frustrating. What little development does happen is often carried out to the bare minimum specifications to pass building regulations, with houses that may as well be made of paper and rooms the size of clossets due to massive overdevelopment on each plot of land.<p>Really we should&#x27;ve been building 3-4 new major cities spread around the country. We&#x27;ve had a few smaller scale towns (Cambourne comes to mind) but they don&#x27;t go nearly far enough to solve the issue.<p>We&#x27;ve also got huge swaths of abandoned industrial land in the north, and whilst there has been some regeneration it&#x27;s often &quot;premium&quot; tiny apartments in places like Manchester and Sheffield, primarily being sold to landlords who then let them out to university students.

So the article claims that the housing construction boom that ended at the second WW led to a massive stock of housing, which has since declined due to planning issues, leading to a shortage of housing and therefore a rise in prices.<p>This does not hold up statistically.<p>1939: 11.3 million dwellings in the UK, population 47.9 million people = 4.2 people per dwelling<p>today: 27 million dwellings in the UK, population 67.7 million people = 2.5 people per dwelling<p>A thought occurred: maybe there are now fewer people per household. This however does not hold up to scrutiny either. The number of UK households rose 19% in 27 years, a rate comparable to the increase in housing stock.<p>If anything there is more housing than ever in the UK relative to population size. If prices have risen, it&#x27;s not because of a lack of housing.

In the Netherlands we don&#x27;t really have a big NIMBY issue and we still can&#x27;t keep up supply with demand. Supply is complicated and not just restricted by zoning.<p>One key thing to understand is that private companies build homes, not governments. And if it&#x27;s not profitable to do so, it will simply stop. And if not at least 75% of the project is sold beforehand, the project is stopped altogether.<p>And this is how our government&#x27;s ambitious plan to build ~100K new homes per year got crushed. In particular due to rate hikes, making mortgages even more expensive than before, so potential buyers opt-out.<p>This part is critically important to reflect on as it keeps happening. There&#x27;s an economic downturn and the building of new homes slows down or stops. This happened over here from 2008-2014 creating a massive backlog, in turn leading to a pricing boom in recent years. Ideally, you&#x27;d keep building during a downturn but nobody knows how as there&#x27;s no buyers and it&#x27;s too big to subsidize. Hence, at least in the Netherlands, unaffordable prices are not due to zoning, they are a supply deficit based on downturns.<p>There&#x27;s also labor shortage, material shortage&#x2F;inflation, far more complicated construction due to the energy transition. And yes, higher than usual immigration is a factor. One of many factors.<p>And guess what? In my area, the grid is full. A few more homes can get connected but not a single new company can connect for the coming 10 years or so and it takes billions in investments to fix. This in reference to new housing supply having lots of other dependencies.<p>We also tried rent control on private rent. Guess what? The land lords simply sell the property, now you&#x27;ll have even less rent supply. Well done.<p>My point being: increasing supply is not easy in this perfect storm. Surely the entire western world would not have this problem if it was a simple as a policy change. It very much involves constraints in the physical and economical world.

This is an interesting political trap for the ruling Conservatives that they have made for themselves.<p>The traditional Conservative voter is a home-owner. So you might be a rabid socialist in your youth, but once you get a job, save up for a deposit, and buy your own home, you eventually transition to become yet another middle-aged Tory voter.<p>That pipeline is now broken - young people are unable to save up for their own home or get a mortgage, unless they have generational wealth. House rises have risen sharply and wages have remained stagnant, and now we have inflation - for necessities like food and bills - eating into what little people had to begin with.<p>The solution of course is damn the torpedoes and embark on a massive house-building programme like in the post-war period, but a) the post-Thatcher Conservatives consider that against everything they believe in, and b) current home owners - their ageing voting base - are NIMBYs who don&#x27;t want the wrong sort of people living near them and any reduction in demand that would reduce their value of their homes (and they&#x27;re going to need to sell their homes soon, to pay for social and health care in an increasingly threadbare welfare state).<p>The British press of course likes to blame &quot;woke millenials&quot; or whatever to keep their geriatric readership happy but this is the real reason for the collapse in the Tory vote in the under 50s.

Something cannot both be a good investment and accessible to all. The decision was made to make them a good investment, and thus our lazy, entitled economy that is addicted to foreign goods and services became what it is today.

The housing crisis is universal. There&#x27;s been growing inability to build in many countries, as the article readily admits. People can&#x27;t afford homes across the world: USA, Canada, Australia, even China, where supply isn&#x27;t a problem per se.<p>The article should then address this global phenomenon rather than conclude it is a &quot;political problem&quot;, suggesting it is some kind of peculiar ideology exported out of Britain.

That article has one chart in it that isn&#x27;t emphasized enough - home <i>ownership</i> in the UK is a new thing, and historically not typical. Perhaps it&#x27;s going to become the &#x27;new normal&#x27;.<p>Britain isn&#x27;t flat, especially compared to Belgium and Holland, or even France, which is twice the size. And everyone wants to live in the South East because London is the economic centre, for better or worse.<p>The situation in the south east where we can either grow crops on flat land, or build houses, on the same flat land. And then house builders have the bare faced cheek to name the streets of the new estates after things they&#x27;ve destroyed or you&#x27;ll never see again.<p>Which brings us to the spoke (and no wheel) arrangement of railway lines into London. HS1, and soon HS2 allowing more dormitory towns further out from London where the land is cheaper.<p>London also had a historic height restrictions on buildings, and even now, has restrictions if they block the view of St Paul&#x27;s Cathedral.<p>When the &#x27;new tallest building&#x27;, the NatWest tower was built to a colossal... 600ft (183m), it was controversial [1] in the 1970s.<p>At least now there are tower blocks getting built in London that are tall. Except they&#x27;re expensive, get bought out by foreign investors. And then left empty. So they&#x27;re not much help to anyone other than speculators and developers.<p>It feels like something is going to break in the UK, but it&#x27;s been like this for at least 30 years. It seems like far too much of the UK economy is based on this Ponzi scheme of property. You get better returns on property than any other kind of investment.<p>There&#x27;s whole industries based off of the back of it too (personal investment, and corporate investment, and pension investment funds, estate agents, legal, builders, development, architects, etc.) and the vast amount of <i>tax</i> the govt. takes from all of that.<p>If the UK somehow gets the property market under control (whatever that means), it would have serious implications for the economy as a whole.<p>1. <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tower_42#Design_and_development" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tower_42#Design_and_developmen...</a>

If you wish to solve the housing issue then make it easier for individuals to build homes. Build quality in the uk is appalling anyway so why not streamline the process for people to buy land, build on said land? Also incentivise companies to allow work from home. There is no need for people to cram into overcrowded cities for jobs that dont require in office presence. That way folks can spread around, as i did, in cleaner, safer, less crowded areas of the country.

It seems like lots of places that used to build don&#x27;t anymore (USA anyone) and detailed analysis about why a particular nation or sector is having issues is always helpful. That being said, I think there is also a background issue of much of the &quot;democratic&quot; (really oligarchic) way of governing being overall spent and exhausted.<p>It can&#x27;t focus energy at anywhere near the intensity it used to. Compare the New Deal to recent infrastructure bills. Imagine building the CA Highway 1 today... that was one of hundreds of successful new deal projects.<p>But you can&#x27;t repeat the past and we keep trying to with ever larger bureaucracies doing fainter and fainter imitations of the new deal.

Planning permission was granted for 2.78m homes between 2011-2021. Only 1.6m homes were built[0]. I find it interesting, given the length of the article, that this wasn&#x27;t mentioned.<p>[0] <a href="https:&#x2F;&#x2F;www.theguardian.com&#x2F;society&#x2F;2021&#x2F;may&#x2F;08&#x2F;over-1m-homes-in-england-with-planning-permission-not-built" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.theguardian.com&#x2F;society&#x2F;2021&#x2F;may&#x2F;08&#x2F;over-1m-home...</a>

In the UK, property developers are forced by the govt to build a certain proportion of social housing into their developments, or to subsidise the building of social housing elsewhere. Obviously, this means the high end property is less desirable (because big spenders are forced to live next-door to social housing tenants). And the social housing built will be boxy and low standard, so again, less desirable, and unprofitable for the developer.<p>Whenever the govt distorts free markets, it creates shortages. And housing is one of those markets where we REALLY need the private sector to be allowed to build properties that will meet true market demands, rather than properties that will satisfy govt ideologies.<p>If housebuilding was unconstrained, there would be more of it, which would be good for people at both ends of the market. More high end property means lower prices at the high end, more people moving up out of mid-scale housing, and so on. Prices would fall across the board, and eventually no one would need social housing. We’d ALL benefit.

I don&#x27;t know about Britain but London builds and keeps tearing down homes and low quality repurposing them into 3&#x2F;4 units and creating a perpetual construction state instead of descentralizing.<p>Planning permits are questionable in their legality and you feel things just get rubber stamped and there&#x27;s a pretense of process in the same vein of the first chapter of hitchhikers guide to the galaxy.

To summarise:<p>- Lack of political willpower either due to competing priorities, or lobbying<p>- Banks and economy are tightly coupled to UK housing market<p>- Lots of people aren&#x27;t willing to move to less desirable areas<p>- Lots of people want a McMansion with little&#x2F;no maintenance<p>- Since WW2 we have been dependant on lumber from outside the UK for timber frame constructions. Its less so nowadays, but still a reason.<p>- Immigration + low supply = demand = profit!

It doesn&#x27;t mention that most land in England is owned by large landowners, including aristocracy and the state. There is no real record of who owns what either. <a href="https:&#x2F;&#x2F;map.whoownsengland.org" rel="nofollow noreferrer">https:&#x2F;&#x2F;map.whoownsengland.org</a> ... We have never really had a real land reform.

For people to be able to save and expand their wealth in land, land needs to remain desirable. Desire is driven by the need for housing. Need for housing stays high if the rate of new housing stays low. Thus, rate of new housing stays low. Else we would have a lot more very beautiful sky scrapers.

There are 100 ways we could solve this. And 100 groups, one to veto each way. So nothing will be done, it&#x27;s the bystander effect.<p>The same basic thing prevents action on climate change.

TLDR: once people own a house, it is no longer in their interest to let anyone else build one, and in Britain this tail wags the dog.

Tldr: Churchill was a good wartime leader, but during his second term he screwed up the housing regulations so bad it broke up one of the longest conservative runs of all time with Attlee coming in to try and fix the mess.

At least in my and other countries, there seems no city with restrictions on moving in. Would solve some issues and stop making public sector, traffic worse for true locals. (HN seems to fancy a ban on Airbnbs, as if your quiet single tourist poses an issue...)<p>As if an ever-expanding human dwelling is desirable.<p>Immigration quotas for countries exist (well, at least for sensible countries), we should apply that on a regional and even local level too. And don&#x27;t account for that typical Middle Eastern large family in such numbers, they shouldn&#x27;t be there anyway.

TL&#x2F;DR (according to ChatGPT-4):<p>The article titled &quot;Why Britain doesn’t build&quot; by Samuel Watling, published on 23rd May 2023, discusses the history and challenges of housing development in Britain. Here are the key points:<p><pre><code> Post-War Housing Crisis: After the Second World War, Britain faced a severe housing crisis due to strict planning rules enacted by both Labour and Conservative governments. These rules gave local councils the power to block nearly all housebuilding, with little incentive to permit it. Despite various attempts to address this issue, such as regional planning, a land commission, New Towns, and attempts to loosen planning controls, all of these efforts failed. Historical Context: Britain&#x27;s housing situation has been shaped by its historical context. From the Victorian period onwards, cities expanded with the help of trains, trams, and underground railways, creating the world’s first suburbs. However, housing supply collapsed during the First World War due to the mobilization of potential construction workers for the army, leading to a housing shortage and subsequent rent strikes. Green Belts and New Towns: The concept of green belts and New Towns was introduced to control urban expansion. However, this led to a shortage of building land and an increase in its price from 1955. The green belt around London expanded from a 9- to a 35-mile radius, as neighboring counties rushed to end the prospect of displaced development from the original green belt areas. Land Commission and Housing Production: The Wilson government set up a Land Commission in 1965 to deal with the shortage of land designated for housebuilding and the resulting high land prices. However, local administrations in the South East of England and the Midlands opposed the measures and refused to cooperate with the commission. The Commission was disbanded in 1970, leading to a flatlining of overall housing production in the mid-1960s. Current Situation: The article concludes by stating that the housing crisis in Britain is not due to a lack of political will but due to a lack of understanding of the political dynamics of housebuilding. The author suggests that future leaders should learn from past mistakes and devise smarter strategies to address the housing crisis.</code></pre>

One way to lower the house prices is slashing the demand. They can do that by limiting immigration.

&quot;Since the Second World War, housing in Britain has become increasingly expensive and scarce. &quot;<p>Net migration was 600,000 people for the previous year. It&#x27;s not really a surprise.

One word - corruption. Britain builds plenty but not on a social basis. Profit is king. To get planning permission costs money. Appeal committees must be bought. Britain is the most corrupt country not in Europe..

Remember: regulations are written in blood. You can&#x27;t simply build things willy nilly. The Grenfell Tower fire is a recent and stark reminder of what happens when you don&#x27;t apply a lot of trained and expert input into things.

Britain&#x27;s energy-per-capita has collapsed since 1965 [0]. How are they meant to build houses and live in them without energy? Construction is one of the most energy-intensive activities we have, and maintaining a warm home is up there.<p>Britain is one of the usual suspects who listened to environmentalists, fought nuclear, let fossil fuels slide and bet big on renewables. They&#x27;re going to need to have a bit of a focus on finding some energy somewhere if they want to reclaim the &quot;glory&quot; of even the 1950s. Standards have to drop.<p>[0] <a href="https:&#x2F;&#x2F;ourworldindata.org&#x2F;energy">https:&#x2F;&#x2F;ourworldindata.org&#x2F;energy</a>