16 Dec 2013

Official: last year’s terrible housebuilding stats. Why?

A green field in Northern Hertfordshire – a beautiful rural scene straight out of EM Forster? Or would it be made more beautiful by thousands of smiling happy families in shiny new homes?

The house building faultline across Britain runs through this field.

On the other side of the road, urban Stevenage – desperate to expand.

For years, it promoted plans to build thousands of houses here. But the rural district council fought it and eventually won.

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Now though, the spectre of council-to-council planning wars is back, worrying local CPRE campaigners, who say it is always the green spaces that suffer. “Once you build on the green belt, its gone forever,” it says.

That’s a response to Ed Miliband’s pronouncement of a “housing crisis” to be dealt with by offering urban councils the “right to grow” into rural councils guilty of “homeblocking”.

The Labour leader thinks a lack of affordable housing can be wrapped into his argument about a cost of living crisis.
He turned up in Stevenage today – to back its plans to grow beyond its borders.

The Labour target? 200,000, houses a year.

That’s a target for England, which was a woeful 107,000 in 2012/13. But Mr Miliband may find that voters even in Stevenage, are not so gung ho for new housing. Young mums who might benefit from new house build seemed more vexed by a loss of green space.

Anyway, the official opposition labelling of housing as a “crisis”, is a new landmark in this debate. Is there a crisis? Is not the lack of housebuilding in fact the democratic will of those people in Britain who can be bothered to vote at local elections? Well, right now we are told by all main parties that housebuilding is desirable.The economic reality is a woeful recent cross-party record on house building.

The ONS has now confirmed and slightly revised numbers that I myself calculated a few weeks ago.

In the first year of New Labour, 190,760 houses were completed.. across the UK.

It took a decade to drive that up to 219,070 a year…but nearly half were those buy-to-let friendly flats, not houses.

Flatbuilding, not housebuilding.

So little surprise that during the crisis, that annual total collapsed during the recession – falling by more than a third to 137,400.

Labour blamed the financial crisis which nearly bankrupted many housebuilders, the Conservatives blamed Labour.

Now there WAS a brief rally, under the coalition.

But who can be surprised that after wide-scale planning changes iniitiated by a letter from Eric Pickles, and massive cuts to government funding for housebuilding, the total fell back.

In fact in 2012/13 total UK housing completions fell to just 135,200. Strip out Northern Ireland  to compare with historical tables for Britain (Hat tip Noble Francis) and these are he lowest peacetime annual total for housebuilding on some measures, since the 1920s.
Curiously this fact has not ignited much media debate (previous lows under Labour were prominently featured on front pages at the time) or government soul searching.

It would be reasonable for a government which wants to boast about housebuilding and claims it is a good thing, to explore the contribution of its own policies to such a failure.

Perhaps that contribution is nothing. Perhaps it is all the fault of the eurozone crisis, and actually the weather did play a part.

At the time, though, many people warned that aggressively disposing of Labour’s planning system and slashing housing budgets would inevitably lead to one thing.

(Due to a curious data error earlier this year, these numbers were not available at the time they should have fuelled the public debate).

At the very least, acknowledging these numbers would make more sense than blithely boasting about how the next quarter was a record growth rate (from this historical low, of course it would be), or adding up a few years to make the number sound bigger. Jon Snow in his debate with Housing Minister Kris Hopkins and shadow Emma Reynolds, finally did get some acknowledgement today.

Having said that, the opposition need a catharsis of its own. Gordon Brown promised 3 million new homes at the rate of 200,000 a year  as his number one priority upon entering office, and the rate of housebuilding promptly halved.

And a party which now claims that the housing crisis is inextricably linked with the cost of living crisis needs to find answers to

a. the trebling of real house prices

and b. a fundamental tenure shift in much of the housing stock from first time buyers towards buy-to-let landlord investors, on its watch (or lack of watch).

So we have two bald men fighting over the comb of housing policy, a housebuilding industry more interested in investor flats than family homes, disproportionate effort on boosting housing demand and prices, ahead of the increase in supply.

So both sides talk boldly of building more houses – but both have failed miserably: and this may just be democracy. Not enough people actually vote at a local level for more houses.

But that is surely failing Britain’s next generation.

Follow @faisalislam on Twitter.

7 reader comments

  1. Philip says:

    If we’re constantly going to look at previous Government’s failings, I nominate Mrs Thatcher as the cause of the banking crisis in 2008!
    More important – if Milliband is promising more housing to be built, he needs to explain HOW he will achieve this & how it won’t all go into the greedy hands of the buy-to let brigade.

  2. Andrew Dundas says:

    Flats are needed more than houses because the greatest demand is from one and two person households.
    If we could supply them with the small and good quality apartments small households want, they’d move into them, leaving their hardly used and family sized homes that they don’t need.

  3. Philip Edwards says:

    Faisal,

    I don’t see the problem. Just build over every square metre of the south east ghetto and have done with it. Then it can choke to death on its own greed and waste and the rest of us can restore a decent society.
    :-)

    More seriously, what else did you expect other than this (latest) profiteering ripoff? A culture of fairness and social wellbeing? Did you REALLY expect the latest version of organised Rachmanism to be any better than the one that produced Victorian slums and decaying city centres? Surely you didn’t believe all that crap about “free markets”? SURELY you can’t be that naive?

    Until this nation once again recognises housing as a basic right and necessity and NOT a profiteering mortgage scam for the banks there can be no improvement. It was precisely that scam that led to the necessity for the great slum clearance programmes of 1945-1975. Do we have to go through all that again?

    Once that programme was stopped then reversed there was a logical conclusion: land monopoly ownership by private financial institutions (read: suited up spivs). Privatised ownership leads only to ripoff profiteering, which in turn means actual social requirements go to the back of the queue. Maximum profiteering requires demand to far exceed supply, which of course means control of the rate of supply – in this case, construction.

    The biggest con trick is of course the notion that you “own your own house” if you take out a mortgage……..No, you don’t. You are a tenant of whoever leant you the cash to “buy” it. Meanwhile the developer has added massive profits to the cost of “buying,” far in excess of actual construction costs. In other words, the developer rips off a notional surplus value. Those who think “their” house increases in value are kidding themselves – if they come to sell it and move on, inflation has sucked up the “increase” AND THEY HAVE TO PAY AN INFLATED AMOUNT FOR THE SAME TYPE OF PROPERTY. Which makes the whole process a never-ending giant ponzi scheme, a con trick believed only by those who fall for Daily Mail/Sun propaganda.

    All in all, it is in the interests of the financial institutions to control the supply of housing. If they don’t, the ponzi scheme eventually collapses of its own absurdity, as it has in this case. Doubtless the construction rate will pick up again. But it won’t make the slightest difference to the fakery and fraud that is the mortgage scam.

    Then again, anyone who believed all that “free market” garbage probably deserves all they get.

  4. Patrick Magee says:

    The urban landscape accounts for 10.6% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales.

    Put another way, that means almost 93% of the UK is not urban. http://www.bbc.co.uk/news/uk-18623096

    We have a totally mistaken view of what our country looks like – we are not short of green land. We are, however, very short of houses. The people who try to stop house building are doing it from entirely selfish reasons. In a housing shortage, house prices go up. If we build houses, prices go down. All those ‘protect our green field’ NIMBYs should be ashamed of themselves.

  5. Neil Craig says:

    Every politician & journalist knows how to solve the housing crisis. Get the politicians out of it. 3/4s of the cost of housing is political regulatory parasitism.

    But you ain’t gonna hear this from any of the political parasites (or the loyal and obedient journalists who say what they are told).

    Let the free market work and houses would be available at 1/4 of the price & this would, in time, work through to rent, mortgages etc.

    Meanwhile “developers”, at least successful ones who get planning permission, continue to be among the biggest donors to political parties.

  6. Patrick Magee says:

    The reason is simple: those who already own high value home on or near greenbelt land have an enormous vested interest in kicking the ladder away from those unfortunates who cannot afford to buy a house near them. This is compounded by the fact that we (as a very largely urban based population) have a massively mistaken impression that we have a land shortage. In fact well over 93% of all land in this country has no buildings on it, and wooded land area has doubled to 12% over the last few decades (check out the UK NEA report if you doubt those figures). Those clamouring to ‘protect the greenbelt’ should be ashamed of their naked greed.

  7. Neil Craig says:

    Phillip you are

    1 – Giving your word that housing will, in your totalitarian socialist utopia, be “a basic right”

    2 – Giving your word that in the totalitarian socialist utopia builders will be prevented from “concreting over” land to build houses.

    Obviously, while accepting the combination as the very highest standard of honesty to which the totalitarian “left” ever aspires, it is totally impossible for both statements to be in any slightest way truthful.

    You are also clearly aware that the hated Victorian “free market” created an enormous amount of housing with very little resources – far more than socialists ever did with many times as much money.

    Politicians of the “left” deliberately produce poverty and lack of housing to exploit those impoverished by promising, when hell freezes over, to end it. Of course the thieving parasites never do.

    You know this Phillip. You know what corrupt scum the “left” is.

    I invite any “leftist” supporter here (including Phillio, either to explain how both Phillip’s promises can be kept or to apologise for being part of a movement of wholly corrupt, lying, totalitarian parasites.

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