For years, the country, but more prolifically the capital, has been failing to generate the numbers of new homes it needs to house a population that has been growing fast. According to the 2011 census, London needs at least 40,000 new homes every year just to keep pace, yet over the last three years, only 107,800 were built.
Councils in London have recently calculated that to clear the backlog and meet growing demand more than 100,000 new homes a year are required—but house prices in London are now soaring above where they were before the crash, placing homeownership beyond the reach of ever more Londoners, not to mention others who would like to move here. This is not a recent phenomenon. The days when an average sort of London wage could buy a first, modest London home in a shabby part of town disappeared more than 30 years ago.
There has been a more modest decline in the social rented sector in recent years—fewer residences, then, for people on low incomes and in great need. Meanwhile, the private rented sector has enlarged in the last ten years, but that too has become ferociously expensive and, in too many cases, is badly run.
The social implications of rising cost and under-supply are shocking. Over-crowding is rife, with dwellings having too few bedrooms for their occupants. The cost and insecurity of the private rented sector also fosters unwelcome population churn, with households having to move against their will, often disrupting school, work and family life for those most in need of stability.
Unencumbering market forces could be the solution, at least in the short term. It’s not so much a question of the type of housing supplied but the quantity. We must deliver more homes, all told. And that is the biggest and best solution to a lot of the controversies and the discontents around housing at the moment. Coupled with the basic rules of supply and demand, this should ensure that house prices become stabilised, as long as supply isn’t blocked by things like speculator taxes and over-regulation.
Doing this, however, is a far larger task, one that entails matching a vastly increased supply of homes to the full spectrum of demand, with those on middle and low incomes as the top priority, modernising the private rented sector and shifting spending away from benefits and towards investment in low-cost homes.
