Welcome to 2024, where owning a home is a distant dream for many and renting can be as costly as having a mortgage. Roughly 1 million people are on social housing waiting lists. Homelessness and overcrowding are all too common. And people are getting into a lifetime of debt with little left to spend on other essentials after housing costs.
There’s no doubt about it: alongside the climate and nature emergencies, we’re in the midst of a housing crisis.
- In May 2014 the average price of a house in England was £196,000. In May 2024 it was over £300,000.
- Average mortgage payments have doubled from £536 per month for a terraced house in January 2005 to £1,063 per month in December 2022.
- In April 2024 average UK rents hit a record high of £1,223 per month, a 7.2% increase on the previous year. The lowest average rents are £695 per month in the North East, while the highest average rents are £2,121 in London.
To tackle that crisis, the new Labour government announced in July 2024 that it would ease planning laws and open up the green belt to build the homes needed. But what got us into this situation in the first place?
Are there enough homes in the UK?
The short answer is no.
Millions of former council homes have been sold through the "right to buy" scheme initiated by Margaret Thatcher and haven’t been replaced. Second homes, holiday lets, and empty homes create severe housing shortages in some areas. And an unregulated private rented sector has driven-up the cost of renting.
What’s more, developers have gained permissions but not developed sites (called land-banking), which can lead to housing shortages being maintained or exacerbated, driving-up house prices and boosting the profits of the housebuilders.
Previous Labour governments and the recent Conservative government failed to meet their own house-building targets. The new government has said it’ll reinstate targets and ease planning regulations. But if houses are to become affordable, it’ll take more than just changes to the planning system.
How to lower house prices
The argument "more homes = lower prices" is superficial and gives too much weight to supply-and-demand economics. In any case, there’s a lot of pent-up demand, with an increase in 18–34-year-olds living with their parents and a growing population in areas such as Cambridge.
So-called affordable homes are usually offered with just a small reduction on market rates (eg a 20% reduction), which for many people is still well out of reach.
What the market needs is millions more social homes to take the heat out of the private rented sector – alongside rent regulation to prevent landlord profiteering in rental hotspots – plus a focus on building genuinely affordable homes.
Government restrictions and a lack of funding have prevented councils from building the houses we need. Those barriers must be removed so councils can borrow, invest in and develop affordable and social homes, which would help break the oligopoly of the big private developers who've shown little interest in developing affordable, good quality homes at scale.
Such need was recognised in 2017 by then-Prime Minister Theresa May: “We will diversify the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods. We will encourage housing associations and local authorities to build more, and we will work to attract new investors into residential development including homes for rent.”
Millions more homes will eventually reduce prices if most new homes are affordable and/or social homes. But action on profiteering by private landlords and reducing the numbers of second homes and holiday lets in some locations is also necessary and can have a faster impact.
Will planning fix the housing crisis?
The planning system has been under constant attack in recent decades because it’s been easier to blame it for the housing crisis than to examine why the housing market is broken and why the developments we do get are of such poor quality and design.
Of course, planning decision-making can be improved and made less bureaucratic, but that relies on:
- Central government being clearer about the standards development must meet as a minimum (including levels of energy efficiency in homes, nature standards, public transport provision, etc).
- Properly resourcing local councils and planning authorities to do the job right.
- Developers stopping gaming the system whether by threatening appeals or legal action, gaining planning permission but then sitting on the land, amending key conditions later down the line or invoking the notorious "viability clause" to claim they cannot afford to meet affordable housing (or other) standards or provide local infrastructure for fear of eating into their profits.
Developers often like the idea of cutting planning rules. But scapegoating planning is an easy option and a distraction from the broken housing market which many in the property sector have profited from and helped perpetuate. Many developers have also actively opposed measures to make housing more energy efficient, less wasteful with water, less harmful to wildlife, and less prone to flooding.
Planning reform must be first and foremost about bolstering the capacity and strength of planning departments to require developments in the right locations to the right standards. Local authorities will need many more well trained and experienced planners – much more than the 300 promised by the new government – as well as more in-house ecologists to ensure homes are well designed and better located. After years of austerity far too many councils simply don’t have the resources and expertise needed, including to challenge poor schemes pushed by the giant private companies and to map out better options.
Where to build homes in the UK
The Labour government has prioritised housebuilding on brownfield land but also plans to repurpose some previously developed green belt land, which they refer to as "grey belt."
As Friends of the Earth and others have said for many years, parts of the green belt are largely devoid of nature because of intensive farming. Much of it is also not accessible to the urban communities it surrounds to visit. We’ve called for the greening of the green belt with nature restoration and access at the core.
However, we don’t think that the green belt is a no-go area for housing, not least because of the scale of housebuilding that’s needed. But it should be the last resort rather than first choice because of its important role in preventing urban sprawl and the merging of towns and cities.
While brownfield sites are rightly the first option, the nature value of some brownfield sites in denser urban areas also needs recognising; not all can or should be built on. In some locations, brownfield sites have been taken over by nature and are important wildlife havens in urban areas. They also provide much-valued greenery for residents and help cool surrounding areas during heatwaves.
It's simplistic and wrong to suggest all brownfield sites should be developed and green belt must never be touched. Many brownfield sites should be developed but not all, some green belt will need to be freed-up for housebuilding, and the remainder should be opened-up to public access and managed to bring back wildlife, including through more nature-friendly farming.
And obviously, important wildlife sites must also be protected as they’re the last fragments of what was once a much more nature-rich country.
How to build better homes
Poorly designed and poorly built homes are all too common, with cash-strapped local authorities unable to challenge poorly designed schemes.
Many new homes built in the last 10-20 years will still need retrofitting, can be prone to flooding, have added to already over-loaded sewage systems, and usually require homeowners to own a car to access basic services or employment.
Proper scrutiny of what developers propose can and should improve developments and ensure problems are ironed out instead of being left hanging for others to deal with after the developer has moved on.
More and better housing is needed, which means:
- Decent infrastructure: homes with ready access to quality local green spaces, schools, healthcare, shops, reliable bus services, and genuine choice about walking and cycling without having ‘no choice’ other than to use a car.
- Truly affordable to buy, rent and live in: quality also means homes that are cheap to live in because they're well designed, built to last and fitted with energy and water saving kit as standard, and made ready for a changing climate.
- Higher density: high density homes doesn’t need to mean low-quality cramming either. It can be designed with adequate space for privacy (with minimum space standards set), low-rise (3-5 stories), including mixed-use developments, with mixed community tenancy, built to high quality design standards and with a quality management regime to maintain standards.
- Environment built in from the start: sewage infrastructures upgraded in advance so that the problem of nutrient overloaded river catchments is not added to and internationally important rivers for wildlife can be restored; nature should also be better protected and improving on it through fitting bird and bat boxes, tree planting and restoring and creating new habitats such as wildflower meadows; while homes should be fitted with solar panels, heat pumps and be well insulated so they're warm in winter and cool in summer.
The role of communities in new housing developments
Communities should have a voice in decision-making locally. Local voices must be heard, and councils must balance these with the urgent need to provide affordable homes.
There’ll always be those who object to any developments and they can be vociferous. But many people recognise the need for new housing, particularly affordable housing, in urban and rural areas.
Processes that allow a proper examination of all the issues and all voices to be heard are likely to arrive at more consensual outcomes. Well-designed consultations, such as citizen assemblies, are well worth the investment as they can ensure all voices are heard, and debates are well informed.
