Morgan Schondelmeier

How to end the housing cartel

It’s no surprise that house prices have risen faster over the last year than they have in almost the last twenty. After all, everyone has realised what a difference a home can make: the extra space for a home office, a garden for fresh air or even just a quiet corner to escape the reality of lockdown. Not to mention a stamp duty holiday encouraging people to buy quickly. But the luxury of homeownership is slipping away for many young people. 

While these increased house prices are a boon for those lucky enough to be on the housing ladder, it spells further disaster for those of us waiting impatiently on the sidelines. House prices have reached an almost record high, growing 13.4 per cent in the year to June. It’s not all down to Covid either. The surge in house prices reflects the ongoing mismatch between supply and demand in this country. There are far too few homes to meet housing needs.

The clearest solution is to truly democratise house building

Without enough homes in the places people want to live, we will have an ongoing battle whereby increasing numbers of young people are fighting for a relatively stagnant number of homes. There were 243,000 homes built in Britain in 2019/20. It’s more than in recent years but it pales in comparison to the 400,000 during the 1960s when our population was substantially smaller. While homeowners sit pretty watching their net worth grow, generation rent sees their dream of homeownership drift further and further out of reach.

This is a man-made problem. Normally when demand outstrips supply in a market, more producers enter the market to profit and fill the gap — then prices go back down. But we have designed a planning system that makes it diabolically difficult to get permission to build more homes.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in