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Housebuilding is up: is that good news?

21 August 2014

Good news on housing: this government is building more homes. New figures from the Communities and Local Government department show housing starts in the second quarter of 2014 increased by 18 per cent on the same quarter a year earlier and now stand at 36,230. Housing starts are the best picture we can get of how healthy housebuilding is right now. Completions, which naturally reflect an earlier situation but can also be affected by sudden changes in the economy that leave homes half-built (as in Ireland’s ghost estates) are also up by 7 per cent on the same quarter last year and up by 6 per cent from the previous quarter. Annual housing starts in the year to June 2014 were 137,780, which is a 22 per cent rise on the previous year. Completions for the year were 114,440, up 7 per cent.

This is the highest level of housebuilding since the pre-recession peak in 2007. Jolly good. Housing and planning minister Brandon Lewis is happy, saying: ‘Wherever you look across the housing market, the signs of progress are clear.’

Now, far be it from me to sound a note of gloom on the government’s progress on housing (oh, except for here, here, here and, er, here). But while this is all very well and good, it’s not exactly time to sit back and say ‘job done’ on planning reform. There are two reasons for this.

  1. It’s not nearly enough. This is what campaigners say whenever there is a piece of good news. It sounds ungrateful, and ministers could quite easily argue that housebuilding is on an upward trajectory. Both points can be true: housebuilding is rising, but it may peak before it reaches the necessary level. Economists estimate we need around 250,000 new homes a year (and before certain people get too excited, it’s not all down to immigration, even though that is a facile excuse: immigration accounts for 90,000 of new homes that are needed, and there are other factors such as fragmented families, people staying single for longer but not living with their parents and population growth) to keep up with demand. A 22 per cent rise in annual housing starts to 137,780 on last year is a good thing. But it’s not 250,000.And the worry is that these welcome rises won’t continue and that the planning system will continue to constrain development, as it has done for many years, so that sufficient numbers of homes are never built. Those who are worried are not just people like me who like to make a hobby out of wringing their hands about housing: they’re the people making decisions in government. It is difficult to find a minister who will honestly say off the record that the government has made sufficient changes for enough homes to be built. More homes, yes, but not enough homes. There was certainly a great deal of consternation from the pro-development faction in government when Nick Boles was moved from the planning brief.
  2. People are getting angrier about development. The so-called ‘Nimby’s charter’ that the Conservatives apparently proposed as part of their planning reforms failed to materialise: instead, voters are so antagonised by the way the new system continues to impose new housing on them that Labour feels there is mileage to be gained from promising voters a ‘real choice’ over housing development. Nimbys have flourished not just because people are selfish and prefer to look out at rolling hills rather than countryside scaled over by new roofs and driveways, but because the state has taken the goodwill of the public for granted on housebuilding for too long already. Continuing to antagonise the public over planning will not encourage a change in attitudes towards development. And so a rise in housebuilding could appear in tomorrow’s papers as a frightening thing because so many readers are still opposed to new development.

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  • Jacques Strap

    ‘and before certain people get too excited, it’s not all down to
    immigration, even though that is a facile excuse: immigration accounts
    for 90,000 of new homes that are needed, and there are other factors
    such as fragmented families, people staying single for longer but not
    living with their parents and population growth’

    Rubbish, so why are house builders not pleasing that area of demand by not building the sort of properties they need? Old people need small bungalows, single young people need small terraced town houses, both of which need to be built on brownfield land IN TOWN CENTRES.

  • Roger Hudson

    The main problem is that the housing we need is not the same as that which makes a profit for developers.
    A classic example is the well documented Woodberry Down re-development, the two luxury towers are complete and all the units sold, except hardly anyone lives in them. They are not ‘living apartments’, they are buying and renting (occasionally) speculative apartments. The bit in the advert that tells how far it is from ‘The Ivy’ is the give-away. The old estate residents, some who had bought their council houses yet were evicted under HA section 20 powers, can’t even afford the ‘social housing’ part of the re-development. Likewise the little green field boxes built with a ‘garage’ you need a Smart Car to park in it, semis where you can hear you neighbour fart. They built better housing, even council housing, in the early 1950s.

  • Smithersjones2013

    I notice in the flatulent comments made by Hardman regarding the immigration that she fails to recognise the backlog that fifteen years of net immigration and failure to build enough houses has created and the increasingly negative impact that is having on society.

    If we were talking a backlog of tens of thousands of houses then it would not be an issue but we are talking about a backlog of hundreds of thousands of houses over 15 years and every year that the governments targets are missed then the backlog increases and the situation worsens

    Now as the backlog grows then the government targets must grow to compensate and to address the growing shortfall but given that the Housing Industry have failed to meet current targets then the idea that they are somehow going to redress the shortfall seems implausible to say the least. Now the only other way to address the issue is to reduce demand.

    Now one could attempt to control the birth rate but not only would the political consequences of that be devastating for the establishment but it would likely not have a significant effect for a generation or more. Imposing arbitrary rules about who may or may not buy properties could reduce demand but would be equally politically devastating. The obvious and simplest option is to control immigration because it is both immediate, justifiable and achievable and would be be politically sufficiently acceptable.

    I really cannot understand what it is that makes the obvious so difficult for our deranged political classes to swallow!

  • whs1954

    “Economists estimate we need around 250,000 new homes a year (and before certain people get too excited, it’s not all down to immigration, even though that is a facile excuse: immigration accounts for 90,000 of new homes that are needed,…..”

    Now, why sneer, as plainly you did, when writing this? About “certain people”? If your figures are correct, what you say is wrong. The inevitable conclusion is not that we need 250,000 new homes a year; but that we need only 160,000 new homes a year, and closed borders to immigrants.

    But even that’s not right, because most of the 160,000 new homes are for second and third generation immigrants, mostly of Muslim origin, who appear to be culturally conservative but once married can’t keep their legs crossed. We need most of those 160,000 new homes to house families with three, four, five or more children who outgrow the flats they took up when newly married, or alternatively we need those new homes to put their children in when the latter turn 18.

    We are talking about thousands of third and fourth generation immigrants, turning 18, needing to be housed; yet, in no way assimilated to British culture. These new families and new eighteen year olds needing a flat aren’t just problematic in terms of housing but in many other things.

    This – newly weds in Stepney or Bradford, marrying their cousins at 18 and having five kids – far more than those who flood into Heathrow each day, “are for the most part the material of the future growth of the immigrant-descended population” (to use an old phrase). This, happening now, is where the ISIS fighters will come from in 2030 and 2035. This is where most of the bombs on the Tube in the next decades will come from. This, when they turn 18, is where the bulk of the benefit claimants of the next decades come from.

    But let me to stick to the housing issue – take these people out of the equation, and we in Britain only need 100,000 new homes, if that, built each year. Ignore that problem, and instead sneer at your commenters, at your peril and the nation’s peril, Ms Hardman. Rather than advocating building, why not consider, as I say, taking these people out of the equation instead?

    • Smithersjones2013

      It’s fascinating to get such insights into the mindset of the lesser spotted Westminster Freakshow clone. After all, if you think about it there are three options. Increase house building (politically difficult), reduce immigration (politically popular), or destroy social cohesion (politically disastrous)

      So which of these positions do the Freakshow choose as their default the one that will do them most damage and to cap it all they then make themselves even more unpopular by sneering at those who have come to the logical conclusion that if one cannot be achieved (building sufficient houses) and the outcome is totally unacceptable then the remaining option (reducing immigration) is the option is the only sensible way forward

  • Smithersjones2013

    How about some balance in this article huh?

    What Hardman fails to mention is the Building Industries involvement and particularly the large construction companies in this. One might call them POMP(ies) because they will only build in ‘Places Of Maximum Profit’ and are purely pursuers of maximum profit.

    They don’t want to build on brown field sites that have a high clean up costs or in small unobtrusive numbers across numerous locations which would offend nobody but will not attract the maximum economies of scale their obese business models demand . They don’t want to get ensnared in building large numbers of social housing properties that drag down the price of the rest of the surrounding accommodation they are building. No what they want to do is plonk godforsaken enormous high status clone estates with no facilities across the green belt where they can make the maximum profit

    Of course these large construction companies have squeezed out most of the smaller competition that would have built properties for a lesser profit. So much for the ‘free market’.

    So instead of whining about nimby’s all the time isn’t it about time Westminster started thinking about rebalancing the building industry and making it healthy again?

  • Denis_Cooper

    “… immigration accounts for 90,000 of new homes that are needed, and there are other factors such as fragmented families, people staying single for longer but not living with their parents and population growth …”

    What do you mean by implying that “population growth” is one of the
    “other factors” which has no connection to “immigration”?

    Before the government started to allow and encourage mass immigration the population of the UK was beginning to stabilise, with hardly any excess of births over deaths and with the continuing slow increase in the population almost entirely due to greater longevity, a temporary effect which would have soon disappeared.

    Now with the past net inflows of immigrants of child bearing age, the “young workers” we were said to desperately need, births are significantly exceeding
    deaths – by about 240,000 in 2012 – and that is driving up the population.

  • swatnan

    We don’t swant more Tower Blocks please but good decent homes with gardens.
    So accentuate the horizontal, not the vertical.

    • Chris Morriss

      We want incentives for (certain) people to have fewer children!

  • Seldom Seen

    Do remember however, that if you are of a liberal-left persuasion, or a Guardian journalist/reader, then this government is NOT building more houses, even though they are. The facts never sit well with agenda-based columns …

  • alabenn

    People moving back in with their parents is partly because when Labour imported millions of immigrants, this depressed wages, the result is people cannot afford to maintain their current homes, building more will not help them.
    Now that is rubbing their noses in diversity.

  • JonBW

    The present level of housing growth is unsustainable environmentally, economically and socially.

    Our children will not thank us for it.

    • LarryH77

      Righto, we’d rather live in city slum conditions and let a minority keep their rolling field views from their country holiday homes.

      • Colonel Mustard

        “city slum conditions” vs “rolling field views from country holiday homes” is a ridiculous polarisation. And hyperbole.

      • JonBW

        The real choice is between a social and economic collapse created by a property bubble as experienced in Spain and Ireland and a sustainable (in every sense) future.

      • Blindsideflanker

        I gather we already have favelas being built. All part of the enrichment.

        You might say the people of our country voted, in the size of families they chose, to have a stable if not lower population. It was the Governing class who chose to ignore that and engineer population expansion with mass immigration.

        Not surprisingly the establishment meets hostility when they seek to build over our country to house their immigrant population, for they never had a mandate to do this, and the only way to force a rethink about their mass immigration is to create a crisis resulting from consequences of their policy.

        • Denis_Cooper

          Worse than that, the government used the NHS and other means to actively encourage the people of this country to limit the number of children they had to stabilise and possibly even reduce the population, and then when that was close to being achieved it turned its policy around to wanting to increase the population and to do that by importing large numbers of other people’s children from abroad.

  • kyalami

    Where I live has had so much growth forced on it that it’s ten times the size it was in 1980. If the government wants to keep forcing us to take more it can go home and prepare for opposition.

  • Magnolia

    “Nimbys have flourished not just because people are selfish and prefer to look out at rolling hills rather than countryside scaled over by new roofs and driveways, but because the state has taken the goodwill of the public for granted on housebuilding for too long already.”
    The implication of Ms Hardman’s words are that nimbys are selfish because they want to preserve the green lungs and the agricultural means of feeding ourselves for the benefit of future generations and for all. I have seen comments that say thank God for the nimbys.
    This piece is biased and is a personal rather than a comment opinion.

    • LarryH77

      Oh no, not the old “green lungs” myth again…

      London’s “green” belt is 20 to 40 miles from the centre, several
      times its area and yet London has the worst air pollution in Western

      The entire population lives and works on just 10% of the country.

      • Magnolia

        I do not believe the 4-5% figure.
        Look at a map of Britain or England and the built up areas look more like 10% to me.

        • Chris Morriss

          The figure for England is about 10%. It’s the empty moors and mountains of Scotland that reduce the figure so much.

        • andagain

          This article may help:

          “Having looked at all the information, they calculated that “6.8% of the UK’s land area is now classified as urban” (a definition that includes rural development and roads, by the way).

          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. But even that isn’t the end of the story because urban is not the same as built on.

          …In England, “78.6% of urban areas is designated as natural rather than built”. Since urban only covers a tenth of the country, this means that the proportion of England’s landscape which is built on is…

          … 2.27%.”

      • whs1954

        Name a country in the world (micro nations like the Vatican or Monaco where the population can escape a mile over the border to greenery) do not count) where the entire population lives on more than 5% of the land. Stacked cheek by jowl, life is not worth living. England already has the highest population density of any European nation. London has the worst air pollution as a result.

        You smirk at London’s green belt and suggest we can build over it because London already has the worst air pollution – eh, why bother how much worse it is than second place! you can’t get worse than bottom place! – the moral is not to not care, but to start extending the green belt both further into London and further out the other side.

        • andagain

          Jersey and Guernsey have a population density of 840/square km. Compared with 255 in the UK.

          In Bermuda, it is 1200.

          I would not call Jersey, Guernsey or Bermuda especially unpleasant places to live.

          • Jacques Strap

            They are not the same places though are they?

            • andagain

              Nor is any other place I might have compared them with. The point is that if they are not especially built up, England can’t be either. Just because you (or I) think of the inside of some city when thinking of England, it doesn’t follow that most, or even much, of the country is like that.

  • MK

    My parents object to any building of new homes in the village.

    Their village has produced 1000+ kids over last few decades – where does the village think these kids they produced should live?

    The village I live in now is mostly London downsizers and holiday homes, the bedroom occupancy on any average night is <25%.

    The couple of families left are squeezing kids in to bunkbeds and have a trampoline touching 3 sides of the postage-stamp sized garden.

    Local services slowly close as the new retiree residents don't need schools or a local shop as they buy online, they don't need public transport for commuting and they don't want local builders doing anything that dilutes the value of their property.

    The problem isn't just the NIMBY situation in rural communities, the problem is mostly that too many 3, 4 and 5 bedroom properties have two boomers rattling around in them – with no tax pressure to release some of those rooms for working professional families that need them – but cannot afford the 10-15X local salary anything with more than 2 bedrooms now costs.

  • HookesLaw

    I think we can be sure that if housebuilding is up it will be described as bad news. If housebuilding is down it will be described as bad news.

    • southerner

      You and the rest of the socialists are bad news.

  • Ludo

    We need a land levy to encourage enterprise and prise land from the land hoarders. Tesco is finally selling some of its unused land for homes but two million people have had to move back in with their parents because of the shortage of land for building a home for themselves. 36,000 homes a quarter is only half what is needed. And, yes, immigration is too high.

  • Alexsandr

    No mention of immigration – the main driver of housing demand. 3/10 -could do better.

    • HookesLaw

      A report by Migration Advisory Committee and the London School of Economics refrred to the impact of migration – primarily Tier 1 and 2, i.e. skilled and
      highly-skilled workers – on access to housing and the housing market. (relatavely small numbers)
      The report argues that:
      “the impact on house prices of the accumulated increase in Tier 2 type immigrants over a five-year period is likely to be well below 1%. This might generate some transfer of properties to the rented sector but the effect on total new supply is likely to be very limited.”
      and goes on to say:
      “There is very little reason to assume that the impact of migrants will be any different from that of general demand.”

      A house of Lords report said…
      “the majority of recent immigrants live in the private rented sector,” and overall “rents have been largely unaffected as some have crowded into existing properties and rented poor quality housing shunned by the local population.”
      It did nsay that:
      “Immigration is one of many factors contributing to more demand for housing and higher house prices. We notethe forecasts that, if current rates of net immigration persist, 20 years hence house prices would be over 10% higher than what they would be if there were zero net immigration.’
      That of course is over 20 years and assumes an unlikely zero net migration. ie 0.5% per year – less in the real world.

      A University of Cambridge study (2011) concluded that an immigration inflow equal to 1% of the local initial population leads to a reduction of 1.6% in house prices. Their evidence suggested that what drives house prices up is mostly “branching deregulation, particularly in metropolitan areas where construction is inelastic for topographic reasons.”

      • Smithersjones2013

        Blah blah blah blah blah. Nobody believes you or your reports. That’s what happens to a discredited and corrupted establishment. Nobody trusts them anymore! Its just lies more lies and statistics…..

    • monty61

      Not quite. The changing shape of families, people living healthier for longer (and having the means to stay in big houses rather than move to smaller ones on retirement) and the curse of nimbyism are bigger drivers of housing shortages than immigration.

      • Blindsideflanker

        But mass immigration is an immediate external pressure we could well do without, where as living longer is a social advancement that has a rather long lead in time for the Government to plan for.

      • Aberrant_Apostrophe

        So 36% of new housing required by immigrants is, how does the author put it, a ‘facile excuse’?

    • serialluncher

      Then you haven’t read the article properly. 0/10 for reading comprehension.

      • whs1954

        You’re the one who hasn’t read it properly. The OP herself admits that at least a third – 90,000 – of those 250,000 new homes are needed for immigrants. Now add in the (often multiple) children of first, second and third generation immigrants. I suspect less than 100,000 of those new homes are needed for the indigenous population. It follows immigration is the driver of housing demand.

        • serialluncher

          Farage is himself the son of a third generation immigrant.

  • YahYah

    “Economists estimate we need around 250,000 new homes a year”

    I think you’re being too kind. That’s a guesstimate. The way it works is that economists take the peak of housebuilding in the UK (1954 — 208,000) and work out the ratio to the population (50,765,000), then they assume that (because it was the peak, obviously) that’s the proportion of new homes we need every year (obviously). So apply the ~0.4% ratio of new homes to the current population (~63 million) and you get around about 250,000.

    Obviously, this is a precise science, and we should pay no heed to the fact that homelessness has been falling for years despite our failure to meet the required expansion in the housing supply.

  • The Masked Marvel

    Oh, dear, rather a large increase in our carbon footprint, what? Is there no end to the damages caused by government spending?

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