By Graham Burgess 

Member of MDC Planning Board 2003-7 

Chair of Frome Town Council Planning Committee 2011 – 15 

We are forever being told that there is a serious housing crisis and that we must build hundreds of thousands of new houses each year if this is to be solved. It worries me that this has now been said so often that it is coming close to assuming the status of an irrefutable ‘truth’. I increasingly wonder, however, whether a very real ‘housing crisis’, isn’t being conflated with a less certain ‘housing shortage’ for motives other than housing needs. 

A former local authority housing officer once said to me that there was no housing crisis for those who have money. The market may move a little slower here, a little faster there, but this is merely an inconvenience, in no way a crisis. The true ‘housing crisis’ rests in the fact that houses and flats are simply too expensive for almost everyone to buy who isn’t fortunate enough to already own one. 

I don’t doubt that provision of new housing is as necessary now as it ever has been. Yet the current propaganda would have us believe that this crisis is solely a problem of supply; that an increase in population and family breakdown has led to the creation of more households, and that the only solution is to build more and faster than ever before. If this analysis was correct, the number of UK households would have had to have increased by an order of magnitude sufficient to result in the five-fold increase in the value of my own house in Frome as a typical example, in the ten years between 1998 and 2008 (and almost 9-fold to date). It may well be that there are pressures on housing, but it is difficult to believe that these all occurred suddenly, simultaneously, and on such a massive scale during those particular few years. 

It is hardly remarkable that property values were rising with the general (and as it turned out, flawed) economic boom at the time. It’s a straightforward game of Monopoly. If you’re doing okay at the game, you don’t simply hoard notes which don’t earn you anything; you buy property. Soon you’re the owner of clusters of little green houses, and eventually clusters of big red hotels extracting punitive rents from anyone unlucky enough to land on them. At the height of the boom in 2002 there was an average 22% annual increase in UK property values. Anyone with money to invest needed look no further, and many owners didn’t even bother renting them out. Developers continue to market new estates as ‘investment properties’ and buy-to-let private landlords routinely snap up entire streets of new developments. 

For anyone who owned only the house in which they live in the late ‘90s, the fact that it’s now worth several times its original value is truly immaterial. If they were to sell-up they still wouldn’t have any more choice than they originally had as every other house would have increased similarly. Those lucky enough to have owned more than one house at that time have been able to realise the enormous increased value of their additional properties. But those who were not owners at that time, now find themselves, not only locked out of the property market, but forced to pay extraordinarily high rents to landlords – and often without any real security of tenure. With the continuing rise in property values relative to incomes (currently around 8.5:1 in England) the proportion of those who find themselves locked out is increasing. This is the crisis. 

In view of all this, one might well wonder just how a massive house-building programme, such as that promised by both the Conservatives and Labour, is supposed to solve this real crisis. This is even more puzzling since developers are increasingly allowed to wriggle out of their obligations to provide a proportion of so-called ‘affordable’ homes. The (unspoken) implication is always that boosting supply will make houses more affordable and enable young people to begin their ascent of the fabled ‘housing ladder’. However, if market prices really were to be brought down through over-supply, the developers would not want to sell and the government would justifiably fear a property crash once stock values dip below mortgage values. 

In this current environment where property has come to be viewed primarily as investment rather than as accommodation, virtually all property owners now expect to make money when they sell. Given this state of affairs, it is clear that provision of truly affordable accommodation (whether rented or owned), can only be achieved where it is either unattractive to speculation (canal boats, cabins, mobile homes etc.), or else shielded from it. 

This is where Community Land Trusts (CLTs) can make a significant contribution. CLTs don’t simply build houses they make sure the homes they create are of real benefit to the community and remain so in the long-term. They work by acquiring land, by buying it, obtaining it on a long lease, or as a gift. The CLT then oversees the development of social housing for rent. When the homes are let, it’s not just the current residents who benefit from the lower housing costs. An asset lock means the affordability is legally protected so that future residents will also benefit. The homes cannot be sold for inflated profits. They remain as social housing in perpetuity. The large number of CLTs around the country that have created homes for social rent are testament to the success of this model. 

Meanwhile, increases in house prices are generally greeted in the headlines of many newspapers as a cause for celebration on the spurious grounds that it makes householders ‘feel better off’ and therefore more likely to spend money or take out loans. Yet as we have seen, the only people with cause to celebrate are owners of multiple properties or large land-holdings, whilst the growing ranks of the non-freeholders – including the majority of the upcoming generation – can only become more despondent. 

This gives the lie to the true political motive behind massive house-building programmes: ‘economic growth’ pure and simple; growth through construction and its ancillaries, consumer spending (furniture, white goods, carpets etc.), property taxes and mortgage-lending, as well as ever-increasing stock value. This may or may not be a worthy motive in itself, but it will definitely not, and nor is it intended to, address the true housing crisis.