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George Osborne: Housing crisis will still be here in 10 years’ time

4 February 2014

George Osborne’s evidence to the House of Lords Economic Affairs Committee was dispiriting for a number of reasons. The first was that he told the peers that the chances are that politicians will still be struggling to ensure that housing supply keeps up with demand in 10 years’ time. He said:

‘I imagine if we were all assembled again in 10 years’ time we’d still be talking about the challenge of making sure that our housing supply kept up with housing demand and we’re all legislators here and we all have a responsibility to the next generation.’

Part of his point was that the housing crisis is so big that it would be foolish and rather grandiose for one Chancellor to think that five years’ worth of policymaking would be enough to solve it. But as he spoke, there was just the ghost of dissatisfaction with the policies his government has managed to introduce. Asked whether he thought the current planning settlement was enough, he said:

George Osborne: Well I think the planning reforms are clearly working and you see planning approvals up, planning application up, and the percentage of planning approvals up, and more construction. The various schemes – I mentioned the Help to Buy Shared Equity scheme is supporting the construction of new homes and other schemes to support the builders who need help with their cash flow – and then we have a large social housing programme as well underway, so across the board we are pulling a lot of levers but this is a historic problem for the United Kingdom.

Baroness Noakes: Are there any further changes needed to the planning regime, not that they’d necessarily be popular?

Osborne: Well, look I think at the moment, we’ve just got this new planning regime, and, you know I’m keen to see it bed down and have its effect, it is having, I think, a positive effect in creating new homes, and those homes are being built in appropriate places.

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It’s well known that few people in the Treasury really think that the current planning reforms are sufficient. But they also don’t think there’s much they can do before the General Election because voters have been so antagonised by it.

There are a few things, though, that ministers could tweak to at least calm things down at the moment. I understand that the whips are taking soundings from Tory MPs at the moment about whether their councils have local plans in place and the problems with new development in their areas. It will be interesting to see what they come up with.

But there are no tweaks on the way for the Help to Buy scheme: he rejected suggestions that he could reduce the current £600,000 cap on the value of the properties that people can buy with the government’s help.

P.S. I stumbled across some advice for Osborne in our archive… from Enoch Powell in 1950. On whether it was possible for the Conservative party to meet its 1950 pledge of building 300,000 homes, Powell wrote:

‘One more question, which was perhaps the real meaning of the original one: “Can we build 300,000 houses a year and still keep Socialist planning and control ? ” This time the answer is No.’

Interestingly, one of Number 10’s newest advisers, Alex Morton, would argue that the government has kept Socialist planning and control to this day: his Policy Exchange report on planning reform is quite clear that the reforms need to be far more radical than the current settlement. It will be interesting to see how his thinking influences policy from now on.

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  • drydamol1


    The Shambles that the DWP has become has cost the
    Taxpayer Millions upon Millions without one improvement .Are Tory Toffs
    incapable of tackling a problem realistically “to save Tax payers money” a Tory
    spin statement ,all they had to do was close the loopholes concerning Benefit
    fraud and address Immigration Benefits .We would not have a perfect System but
    better than the one now without the unnecessary suffering and the astronomical cost
    . They have had 17 years since the last Tory Government to take a look at the
    Fraud Figure ,why haven’t they bothered ,because its not significant enough
    just a Propaganda issue to plug

    As always with the Tory Hierarchy they will not admit they
    have got it wrong but ever increasingly Osborne rather than IDS is making more
    statements concerning matters .We have the least Debt out of Italy ,France
    ,Japan USA and Germany .

    The Tories have borrowed more in 3 years than Labour in
    13 ,we are paying for their mistakes and they say Labour cannot be trusted with
    the Economy .The Right Honourable Gentlemen of the Tory Government have taught
    us all a lesson – how to deceitfully Lie your way out of a disaster of your own
    making .

  • justejudexultionis

    Well, why don’t you do something about it then you vile, sneering public school dolt.

    • Agrippina

      Because he doesn’t know what to do. He only worked as a towel folder and data inputter. After that he couldn’t get anything else, so ran back to tory HQ to find a safe seat and make some money via the taxpayers.

  • andagain

    So Generation Rent is going to get shafted again.

    But at least the view from their grandparents back gardens will be preserved…

  • HookesLaw

    But the public will howl blue murder if planning restrictions are ripped up. Its not a question of doing what Powell suggested, it would be political suicide to do that. It seems to me more homes could be built in inner cities.

    • justejudexultionis

      BUILD UPWARDS on existing brownfield sites FFS – why can’t people in this country understand that?

  • Frank

    Lets face it, we are going to be out of the EU in 3, or 4 years time (either by a vote and serving notice, or because it collapses), so that will end the EU immigration stream. The Scottish vote will hopefully free us from excess labour MPs and we can then focus on reducing the non-EU immigrant stream. If our wonderful government machine turns its mind to re-balancing the English economy, there is just a slight chance that this will encourage businesses to set up and employ people in the North and not everyone will want to live in the South-East.
    Interesting programme on TV the other day which showed that Sweden can build 2 bedroom flats for sale at £70K. Why can’t we?
    The Tories go on about not subsiding firms and yet all they are doing at the moment is subsiding builders! I am surprised the EU is not investigating.

    • HookesLaw

      Being in the EEA will not stop free movement of labour. Such movements are mostly temporary anyway.
      There seems to be no mass immigration from Romania being reported.

  • kyalami

    The government will have to build two or three more “garden cities”. Given they can’t even sort out Heathrow (or a viable alternative) I am sceptical they will do more than tinker with housing.

  • Daniel Maris

    You lot will love this one:

    “Large-scale fracking in the UK is not likely to lead to big reductions in household gas bills, Chancellor George Osborne has said.” (BBC Website).

    Just like I told you last year. :)

    • HookesLaw

      ‘Big’ reductions…

    • Agrippina

      Lord Browne, former chair BP said the same in November 2013 and Ed Davey Liberal said so in September 2013. There will be no reduction in utility bills from fracking here.

  • Monkey_Bach

    Well, at least in 10 years time it’ll be somebody else’s fault. George Osborne will be nine years gone by then.

  • ButcombeMan

    Here is something rather important. I have not seen anywhere else.

    One of the inhibitions on building on “brownfield sites” nowadays, even those given planning permission, is, I am told by a system insider, the overzealous application of “contaminated land” rules by Officers in Councils who clear (or do not clear) the projects. I am told that very often the contamination is almost unmeasurable and that years ago such sites would have speedily been used..

    .I would be interested if anyone else has similar information.

    It might begin to explain the renewed interest in greenfield and green belt sites.

    Is this yet again, the EU?

    • David Kay

      Councils will freely give permission to build on contaminated land but with a condition in the planning permission that the builders will have to pay to get it decontaminated first, which is usually very expensive. Probably why they go for green belt.

      I cant blame council officials being over zealous, they’re the ones who get sued for negligence if any later health problems arise. If you were the one granting the permissions, would you put your job and everything you own at risk just so some builder can make even more money? I wouldnt

      The EU doesnt want anyone building or living on green belt, theyre implementing the eco fascist UN Agenda 21.

    • Daniel Maris

      You obviously don’t know anything about the subject. You can never tell how badly contaminated land is until you dig down. Sometimes the surface can appear relatively OK, but 10 feet down you can find a dirty oil reservoir.

      This is not an argument against brownfield sites. All else being equal, contamination will just reduce the price of the land.

      • ButcombeMan

        No I am not an expert which is why I asked the question.

        It seems worth illuminating, especially if it means green belt might get more buildings.

        I am told that it is a question of balance . What I am told is that minor insignificant “contamination” is being over egged and that this is a pattern of behavior which has emerged recently.

      • Agrippina

        Corby, contaminated steel site and the children born with defects. That was only adjudicated upon in the last couple of years, so that the persons concerned could be compensated.

  • Mynydd

    Considering Mr Osborne’s record one must double the 10 years to 20, after all he said he would clear the deficit in 5 years, now that has been doubled to 10 years.

    Now Mr Osborne is saying and I quote “The various schemes – I mentioned the Help to Buy Shared Equity scheme is supporting the construction of new homes”
    where in the past he as been saying, these schemes are to help first time buyers who don’t have a large deposit but can afford the monthly repayments. This has been changed to supporting the construction of new homes

    The new planning regime will come into force when the vested interests tell the government what they want, so we know what changes to make.

    He cannot reduce the current £600,000 cap on the value of the properties that people can buy with the government’s help. Those who make donations to his party wouldn’t like it, after all they have their own children’s interest to look after.

  • CortUK

    Says the man whose policies damned-well guarantee it.

    • justejudexultionis

      ‘man’ is putting it a bit strongly for old Ozzer there.

  • In2minds

    Crisis, what crisis? Certainly not a housing one. Perhaps we have always had a shortage of sensible politicians, that’s the real crisis.

  • AnotherDave

    Is George Osborne really the best candidate for Chancellor of the Exchequer in the parliamentary Conservative Party?

    • Agrippina

      No, but he is dave’s friend.

  • Trofim

    By definition there can be no such thing as “enough houses” for a perpetually increasing population, or “enough” anything for something that has no limits.

  • Smithersjones2013

    When government insists on allowing net immigration to run at an average 200,000 per annum then of course there is always going to be a housing problem.

    Why do the political classes continue to prevaricate over the housing issue (or any of the other related issues) when they stubbornly and callously refuse to address the real problem. Nobody is fooled by them anymore which is why Immigration now tops the Mori Issues index alongside the economy.

  • Graeme S

    Boy George … Its not a housing crisis it is in fact an Immigration crisis . Stop those coming and no need for social housing on the scale as yet unprecedented

  • BarkingAtTreehuggers

    Housing in Britain is and historically always been a process dictated by volume housebuilders in a speculative environment. Shortages will work in favour of retail pricing, land tenure in the hands of select few will add to pressures that in essence cannot be controlled by local councils. That’s the deal in Britain, this is how Britain works.

    • MichtyMe

      It is not very expensive to build a house, even allowing for the scandalously inefficient methods of construction still used. What is expensive is land with planning and your volume housebuilders will make more money on land banking and speculation than the building.

      • BarkingAtTreehuggers

        Of course it is – just look at the voting going on on this blog. Hilarious! These silent voters have no idea about how construction in Britain works, or perhaps they do have exactly that…

        • Weaver


          The land a house sits on is about £50,000, more in the SE.

          I can show you identical plots of land literally across the road from each other, and one will be 10x the price of the other. The difference? Planning permission.

  • David Kay

    The Help to Buy mortages have interest rates that discourage people who want to buy. Lenders are reluctant to lend unless you have a big deposit. Valuers are down valuing properties. Councils appear to only give planning permission for blocks of flats so tenants can be crammed tight and packed high which means the council get a lot of money in council tax for 30 properties compared to if it was just 3 houses that were built on that land

    Get a grip Mr Osborne and stop making excuses

  • Shinsei1967

    It’s a bit of a myth we ever built 300,000 houses a year in the post-war years.

    We did indeed build 300,000 but at the same time we were demolishing 100,000 (uninhabitable slums or bomb damaged). The fact that we get anywhere close to building 200,000 (net) houses in these nimby/planning restrictions days is because so many of them are 2 bed flats and not semi-detached 3-4 bed houses with a back garden and front drive.

    Osborne is just being realistic.

    Unless something radical happens like the British deciding they want to live in large 8 storey condominium blocks like many of our European neighbours. Paris has twice the population density of London and no one thinks Paris is uncivilised. But it is built very differently from London.

    • David Kay

      We’re nothing like european cities or countries. An Englishmans home is his castle. We want to live in nice houses with a garden, not crammed tight and packed high so you can listen to peoples TV above and below you while watching your own

      • Shinsei1967

        I don’t disagree with you, just saying that we lack the land mass in the south east to build such houses. As it is the fact that some people in London have gardens at all would come as a shock to residents of Paris or New York.

        And, where I do disagree with you, many people in London (and similar UK cities) live in flats carved out of former larger houses. These are much less user-friendly (i.e. noisy) than purpose built Parisian mansion flats.

        • Weaver

          Have you ever looked at the land-use surveys? For the SE?

          • Shinsei1967

            Yes. What is your actual point ?

            • Weaver

              Well, there’s quite a lot of undeveloped land, even in in the SE. Only about 15% is roads or urbanised, and the majority of that is parks and gardens. There’s about 50% greenbelt, IIRC.

      • justejudexultionis

        Unfortunately, given the very large population on a relatively small island that kind of suburban detached house dream is no longer going to be possible.

  • OriginalChris

    Of course it won’t keep up as we will be subject to waves of mass immigration from new EU accession countries. As long as disparity in income and living standards exist between us and the new members lined up from eastern Europe, the UK will continue to exert very strong pull factors for these migrants. Not rocket science. Basically we will never keep up, and increasing pressures will be exerted not only on housing, but also the NHS, schools, water supply and so on.

    • telemachus associates

      Why must every thread boil down to a rant on immigration?
      There is very good evidence posted many times by our team that immigration markedly boosts our economy.
      Further Dustmann showed that EU immigrants tended to be more highly educated and likely to take to inner city apartment living where there is capacity.
      If we are going to get near the building targets we need the boost to the economy which the recent immigrants give us.
      Further in relation to your final points the UCL study showed that EU immigrants were 21% less likely to take benefits and use health services than established natives.
      Please do not disseminate your inflammatory lies.

      • David Kay


      • Drabble

        Would I be correct in thinking you are in favour of using immigrants as the vanguard to change Wren’s masterpiece into St Pauls City Mosque like the St (Hagia) Sophia.

      • Colonel Mustard

        Why must every thread have Labour-orchestrated propaganda from you and your comrades tagged to the top comment?

        Evidence? Don’t make me laugh. You don’t know the difference between evidence and propaganda.

        Why should anyone even remotely connected to Labour, the EU project and the Fabians who de-stabilised the future of this country by a reckless and malevolently motivated conspiracy to ‘rub the right’s nose in diversity’ be trusted on anything to do with immigration, especially discredited ‘data’ from Dustmann and the UCL?

        Please do not disseminate your inflammatory lies. Enough is enough.

      • David Webb

        Telemachus, immigration and welfarism are two sides of the same coin. Immigration prevents the labour market from working properly. Ordinarily, the labour market should tighten as jobs are created, enhancing workers’ bargaining power, but in fact wages at the lower end are kept absurdly out of synch with accommodation prices by means of immigration. So the entire welfare state is a cost that immigration is exacerbating, by making it not worthwhile for people on Benefits Street to take jobs that would not pay enough to pay the rent/mortgage, and all of your propaganda fails to take this into account. In terms of culture and crime, the costs of immigration are even more stark.

        • Daniel Maris

          Your analysis is spot on. We have a very dysfunctional economy in London and the South East. Another added factor now is that as people’s disposable income has been reducing, we need more dirt cheap labour to be imported to keep down prices and so prevent a disastrous drop in living standards.

      • DWWolds

        I think you will find that Dustmann’s work has been called into question by a statistical expert at the LSE.

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