Douglas Carswell's Blog

The great housing debate

According to the minister, Grant Shapps, house prices are at a record high, having trebled in the space of fourteen years.  Indeed, prices are now so high, the government is having to use public money to ensure that there is enough “affordable housing”.

But is it really the case that the cost of housing is high by historic standards? 

According to Matt Ridley’s Rational Optimist, “Where it took [an average worker] sixteen weeks to earn the price of 100 square feet of housing in 1956, now it takes fourteen weeks and the house is of better quality.”

Despite all that, the trouble, as Ridley goes on to point out, is that the cost of housing is higher than it ought to be.   “Given the ease with which modern machinery can assemble a house, the price should have come down much faster than that”. 

The shortage of affordable housing, suggests Ridley, is caused by government, which “goes to great lengths to prevent the cost of housing from falling”. “Planning laws restrict supply”, while government does all it can to “stop property prices falling after a [house price] bubble.”

The effect of all this is “to make life harder for those who do not yet have a house”, and leaves government trying to “enforce the building of more affordable housing.”

Government ends up using public money and muscle in order to address a shortage of affordable housing caused by government in the first place.  Worse, it ends up being government fiat driving and shaping the construction of many of the houses that then get built, – not necessarily the folk who actually end up living there. 

All too often, I suspect, developers don’t really build homes to meet the aspirations of homes-owners.  They instead construct identikit buildings that conform to the various demands and criteria set out by officialdom.  Instead of asking if the design complies with what the building regulations decree, developers ought to be building in response to what someone is willing to pay to live in and call home.

Perhaps if we liberalised rules on the design of new homes, developers would start to build what real people – not remote officials – wanted to live in. If we quit using public subsidy to build houses, but let people use their own money to buy a home built for their needs, I suspect attitudes to many new developments would change.

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