CEP election analysis
Housing and planning
Executive summary
- In the 30 years from 1989, 3 million fewer houses were built than in the previous 30 years, despite a strong increase in demand.
- This mismatch between supply and demand has contributed to the affordability crisis. In 1997 the ratio of median house price to median income across England and Wales was 3.6 and in London it was 4.0. By 2023 the median house in London cost 12 times the median earnings and even in the least unaffordable region, north-east England, the ratio was 5.0.
- This rise means only younger people whose parents - even grandparents - were homeowners can now be reasonably optimistic of being able to buy.
- As the fundamental cause of our housing crisis is not building enough houses, supply side reform is the only effective solution.
- Only the Labour Party have substantive proposals for reform that could improve housing supply.
- These include restoring mandatory housing targets for local authorities, forcing local authorities to have up-to-date local plans embodying housing targets and having a strategic review of the green belt.
- These are still not radical in that they attempt only to improve a dysfunctional status quo and are unlikely to get 300,000 houses (the target of successive governments) built in any year before 2030. They ignore a range of more effective reforms most of which would boost growth and some of which could directly raise resources, such as moving to a rules-based planning system or at least trialling it in a big city region, reviewing and relaxing height restrictions and view corridors unless real social value can be demonstrated, abolishing Town Centre First policy, adjusting preservation policies to enable energy efficiency improvements in old buildings, and, implementing a strategic review and subsequent reform of property taxes and the system of local government finance.
Paul Cheshire and Christian A. L. Hilber
25 June 2024 Paper Number CEPEA061
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This CEP election analysis is published under the centre's Community Wellbeing programme.