Love, hate and speculation

Words:
Hugh Pearman

The housing crisis is about more than supply and demand

The UK housing crisis is usually presented as a simple matter of supply and demand. Free up enough land and build enough homes of the right kind where people want to live –problem solved. That’s always the attitude: attention then shifts to the how and the where of it. But this is not just a matter of supply and demand, never has been. Overlaid on that are two other incredibly important factors: financial speculation and human emotion.

The government has produced a Housing White Paper. It describes the UK housing market as ‘broken’. Arguably it has been broken ever since, for reasons mainly of 1970s political ideology, councils largely ceased to be housing developers in their own right – so removing a huge chunk of provision from the economy that has never been satisfactorily replaced. 

Oour economics guru Brian Green’s measured reading of the White Paper finds a gleam of hope. For the RIBA, president-elect Ben Derbyshire’s official response flags up the need to maintain good design – and space standards, hard fought-for and now coming under threat – while he suggests the government needs to look harder at ‘the future role of the Green Belt’. Controversial, and he knows this needs great care. Developers will always push to build on green or greenish land, often at low density, because that gives them maximum profits. Once the fields are gone, they are gone for ever. But not all Green Belt land is green.

Once the fields are gone, they are gone for ever. But not all Green Belt land is green

Remember Spain and Ireland, where, in the last boom, vast amounts of new housing supply were fuelled by speculative investment. So the increased supply did not feed through to lower prices, quite the reverse – until the crash, which left ghost towns. We saw a less extreme UK version in the buy-to-let boom, oversupplying one kind of formula apartment, that also ground to a halt. So those who place all their trust in unfettered capitalism, beware. Speculators distort the market and do not automatically provide the necessary variety of homes and tenures. Similarly, shortage of supply does not prevent house-price crashes either: that’s something we’ve previously experienced in the UK. It’s all to do with market sentiment, which is as mysterious as the Holy Spirit.

The absolutely necessary emphasis on using brownfield land as much as possible is a given. Too many UK towns and cities see housing developers building gleefully over fields on the outskirts while available post-industrial sites in the centre remain unbuilt. That’s just stupid, weak planning control. But the nettle that needs to be grasped firmly and immediately is a radical densification of existing suburbia. This is tricky, as those already living in suburbia don’t like it. Here’s where human emotion comes in, and it’s understandable. But the suburbs must be densified, and this must be done well. Who have all the necessary, demonstrable skills to achieve this? Architects.