This book’s central thesis is that the post- war era provided a sustainable series of policies and initiatives which collectively provided quantity, affordability and improved quality of homes. Such a situation was afforded not just through housing policy itself, but a wider coordination and integration of housing as part of a wider vision for an equitable economy. Housing in the post- war era was treated functionally – it was a place to house people, who themselves must take their part in a wider social and economic ecosystem. Not only did this system provide clear and sustainable improvements in housing for the people of this country, but it revolutionised our expectations of housing as a society – creating, for the first time in history, a situation where an average person on an average income could easily access and afford accommodation of a reasonable (and vastly improved) quality.

Since the 1980s, successive governments have however eroded the policies, regulation and legislation which had enabled this new reality in housing to emerge. Generally, the reforms have taken the form of removing the state and other public sector actors from strategic roles in housing delivery and provision, removing or weakening strategic regulatory functions around quality control, and more recently chipping away at the democratic edifice of the post- 1947 planning system as initiated in the Town and Country Planning Act. At a national level, measures have been introduced to liberalise investment into housing, creating baked- in house price inflation, and actively pursuing policies towards urban regeneration and renewal which are to a great extent predicated in consciously increasing values in urban areas to induce further inward investment.

Since the 1990s, governments of all stripes in the UK have sought to resolve the problems facing many of the country's deindustrialised cities, particularly as regards depopulation of once bustling metropolises, large- scale vacancy of plots, sites and old buildings, and plunging land values. The answer that has been provided by policy makers to these issues has been what we now know as ‘urban regeneration’, an attempt to rejuvenate economic growth in formerly industrial urban areas through construction, the transition to service- sector economies and the cultivation of cultural centres and activities.

But these self- same policies for urban regeneration have laid the cornerstones of our current housing crisis today, and given rise to the modern incarnation of ‘gentrification’. We will address two of the clearest case studies around this failed growth model in the UK to illustrate the point.

London

London is the UK's prime example. The situation in respect of housing affordability in London is widely perceived as getting to crisis point. In 2021, a PricewaterhouseCoopers study reported that London's population was set to decline for the first time since 1988 – driven mainly by economic fallout following the COVID- 19 pandemic, but also due to the cost of accommodation. 2019 data from Halifax shows that the average deposit from a first- time buyer in London was £110,656, or 26 per cent of the total value of their new home. This figure had increased three- fold from 2008, where it stood at £38,335.

Quality of housing has been a major measure of social success in the UK since the Victorian era, when the first proper regulatory standards around housing design and spacing were devised and slums systematically demolished to make way for more appropriate new designs. In 1875, the Public Health Act allowed councils to ban ‘back- to- back’ housing, terraces without gardens which were built directly against each other and often over several storeys.

This act was one of several moves by the Victorians to tighten up legislation around housing quality and begin to improve the quality of housing stock, primarily on the basis of public health and tackling squalor. After the Victorians, the recognition of the importance of housing quality to environmental health and wellbeing continued to be codified into the British governmental system. In 1919, the Ministry of Health Act established the Ministry of Health, incorporating planning and housing. During the Second World War, the Beveridge Report set out squalor as among the five ‘giants’ to be eradicated from society and post- war, in 1951, the Ministry of Health was merged with the Ministry of Local Government and Planning.

Some of the outcomes of these changes included the huge expansion of council housing throughout the 1920s and 1930s, houses built to the highest specification with good space standards and modern amenities – as well as slum clearances and the creation of many new towns such as Milton Keynes.

A key failing of government policy in responding adequately to the housing crisis has been an inability to tailor policy, funding and support to the specific issues being faced in different regions – each of which are facing their own chronic housing issues. Additionally, in many instances an apparent lack of reasoning or methodology sits behind many government initiatives.

In particular, much of our current policy appears to be designed and modelled on housing conditions in and around Greater London and the South East, emphasising the areas of the greatest absolute house prices and values. Treasury ‘Green Book’ appraisals for the spending of public money often expressly demand evidence of ‘value for money’, measured in profitable returns, or the growth of high ‘gross value added’ sectors such as financial or other commercial services. Such demands favour areas of the country which are already experiencing the highest levels of property prices and economic growth, against those experiencing the least – often areas where demand for affordable housing is not the greatest, at the expense of areas where it is.

But this regional inequity is not restricted to Green Book appraisals; it manifests itself through many strands of policy making. In this chapter, we will address each area of government housing policy impacted by the phenomenon of regionally unequal policy focus, to better understand the variable impact which government frameworks and assessments for investment, politically motivated decision- making and regional ignorance have on the successful rollout of housing policy across different areas of the country.

There is broad agreement across politics and policy- making circles that the UK today is in the midst of a housing crisis – but while it is strikingly clear that housing is becoming more and more of an issue in modern Britain, our present situation is still favourable on most metrics to most historical periods. In the past 70 years, house prices in the UK have risen on average, in real terms, by 365 per cent,1 street homelessness has increased by 75 per cent since 2010,2 and many of our large urban centres have become unaffordable to live in for anyone on an average British income. In 1955, the average house in the UK cost under £2,000, 4.5 times the average salary at around £48,000 in today's money. Today the average house costs over £282,000 – more than eight times the average UK resident's annual income.

But the 1950s benchmark was never representative of ‘normal’ in historical terms. In 1845, the average price of a house stood at 12 times average annual earnings for a British resident. Homeownership rates may be dropping now, but at roughly 62.5 per cent they are still higher than at any time since the early 1980s. Between 1939 and 1953 they stood at around 30 per cent – and prior to 1918, 25 per cent. As an alternative to homeownership, the proportion of private renters is increasing at a rapid rate, at around 19 per cent of residents. Yet as early as 1961, the private rental sector made up around 30 per cent of the housing market, nearly 60 per cent in 1939 and over 75 per cent in 1918.

In the UK, the delivery of new homes has been outpaced by the need for new housing units consistently for many decades. In the 29 years between 1951 and 1980, the UK saw a total of 8,263,000 new homes built. After factoring in the number of homes demolished through slum clearances and other losses, this amounted to a net increase of nearly six million additional dwellings. In the 29 years from 1981 to 2010, Office for National Statistics figures show that only 5,806,000 homes were built – a reduction in delivery of almost 2.5 million.

Something has happened to housing delivery in the UK which has significantly suppressed our delivery of new units for over 30 years. Between 1949 and 1979, housing completions averaged 327,000 a year. In 1968, the UK built over 350,000 homes – the highest number in history. From 1980 to 2018, the average number of completions was only 195,000 per year (ONS).

On the accession of David Cameron's Conservative government in 2010, a target was set to deliver 300,000 homes a year – increased from the Labour government's previous target of 240,000. This figure would equate to 8.7 million homes over a 29- year period up to 2040 – but the target has never been met. Between 2011 and the start of 2020, there were only 1,587,050 completions – 58 per cent of the target of 2,700,000.

Britain's housing stock is the oldest in Europe, and quite possibly the oldest in the world. It is well established now that in many areas, our ageing housing stock is lagging behind comparable nations in quality and energy efficiency.

On energy efficiency, Britain's homes are the least efficient in Europe, with 13.4 per cent of households living in ‘fuel poverty’ (3.26 million people). Seventeen per cent of Britain's homes are considered to be ‘non- decent’, with the poorest stock condition in the rapidly growing private rented sector. In respect of issues such as damp and mould, poor housing quality in the UK is estimated to cost health services £1.4 billion a year – and according to the Centre for Ageing Better, an estimated 10 million people in England live at risk due to their home failing to meet basic standards.

Since 2012, most of the prevailing funds and initiatives for bringing our existing housing stock up to a decent standard have been wound down or removed – leaving us with a lost decade of stagnation among our housing stock. Prior to 2012, those schemes which did provide funding and support for improving housing stock, such as Housing Market Renewal, were problematic in many alternative respects, reducing the available housing supply for low- income families and contributing to house price inflation.

The UK's retrofit market has never recovered from the scrapping of insulation grants by the Coalition government in 2010 with the removal of the Warm Front grant scheme, leaving our retrofit economy without a clear skills pipeline or strategic supply network to deliver the scale of change that we need.

As noted in the introduction to Part I, inadequate housing supply is an integral element of the UK's present crisis though the question is more complicated than simply a matter of dwelling units per capita. The supply problem in housing is as much an issue of inadequate supply of particular types of housing in particular areas, or in response to particular problems, as it is an issue with the overall number of houses available for use. This chapter will break down the various aggravating factors behind the UK's housing supply crisis, providing an overview of some of the prevailing debates among policy makers, academics and industry.

Changing household composition and distribution of housing

Since 2001 at least, it is clear that the number of dwellings per head of population has increased at a marginally slower rate than population growth. The UK had an estimated 21 million dwellings in 2001, with a population of almost 59 million (ONS) – around 2.8 homes per person. In 2022, the number of dwellings had grown only by around four million to 25 million – while the population had risen by eight million to 67.5 million (ONS) – around 2.7 homes per person.

At the same time, the average size of a UK household has consistently fallen since the early 20th century, meaning that the same number of dwellings must be stretched farther to accommodate more people. In 1911, the mean household size in England and Wales was roughly 4.75 people, which by 1961 had fallen to 3.1. In 1996, an average UK household consisted of 2.42 people – in 2022, that number had fallen to 2.36.

The inflation of house values in the UK presents a huge conundrum for policy makers. The ever- growing value of property and housing within the UK acts as a reservoir of notional nationwide wealth. To collapse house prices to a level at which homes would become affordable would not only have an apocalyptic impact on our present construction industry, it would also have huge ramifications for inward investment and gross domestic product (GDP). In 2022, real estate contributed a total of 7 per cent of the UK's GDP, employing more than 1.2 million people1 – and land value accounts for over 60 per cent of the UK's net worth. Any rapid deflation of property prices could cause immediate crises, not to mention the disastrous impact such a collapse may have upon indebted homeowners, who could be plunged into negative equity, risking foreclosures and a worsening of the general housing crisis.

But the rate at which prices are growing is astonishing – and it is the growth in house prices which lies at the base of the increase in costs in the rental market and increasing levels of debt undertaken to finance mortgages. Growth in prices is now unsustainable – in 1997, the average UK house price was only 2.9 times the average salary. In 2023, it has more than doubled to 8.3 times average salaries (ONS). Controlling house price inflation has to be a key driver of housing policy if we are to stand any chance of resolving the housing crisis – however, managing this process carefully will be key to avoiding a cliff- edge, and potential economic crisis.