Over two decades a rapidly swelling population has collided with a profound decrease in the supply of new homes, leading to soaring housing costs for buyers and renters. The cracks are showing. The number of households in England in emergency accommodation hit 77,240 this year, an increase of 60% since March 2011. On top of an annual housing benefit bill of £25 billion, the UK now spends nearly £1 billion a year just on temporary accommodation for homeless households. Meanwhile, private housebuilders are reaping cash rewards described as “obscene.” With no individual actors sufficiently empowered or incentivised to fix the chaotic market, the author calls for a radical approach: a new National Housing Body equipped with broad powers to get decent homes built where they are needed.
Nationalise the housing market: A radical proposal for an extraordinary crisis”, Blythe traces the origins of the crisis over two decades, during which time a rapidly swelling population has collided with a profound decrease in the supply of new homes, leading to soaring housing costs for buyers and renters.
Construction is about people and how we live; our environment and how we build for our people. We will always need buildings and as our awareness of issues such as climate change increases, so does the appetite for a greener and more sustainable built environment.
Michael Brown, CIOB Deputy Chief Executive
The construction industry contributes about 6% of GDP (£113bn per annum), with the housing sector representing about 38% (£42 billion per annum) of the total contribution (ONS 2017). housing orders were worth £41 billion (25% of orders),
Public and private housing together contributes a total value of £3,923 billion or 56% of the UK nation’s wealth (Pan and Thomas, 2013). Miles and Whitehouse (2013) highlighted that there are two critical aspects which drive the demand for housing: firstly, the UK population is expected to increase with changes taking place in family living styles and secondly, there is an increasing life expectancy.
All the downsides of the housing situation could be flipped into positives. A massive part of this renewal would be the adoption of OffSite Manufactured (OSM) homes; not just in the sense of producing the homes we all need but to engender sustainable, environmental, ethical growth to serve the population and the planet in the future.
The sale of council houses through the right to buy legislation (Housing Act 1980) has caused a supply side shortage that private rented accommodation has not matched. (Miles and Whitehouse 2013)
The average private rent in London accounts for more than a third of household income. While England and Wales have seen rents rise as well in the same period. Large builders account for most new homes as the number of SME builders building has fallen by 80% in the past 25 years. (HBF 2018). Houses have become aesthetically similar (Harris 2018) and released on to the market by the builder to suit their business model and maintain market price (Letwin 2018). When purchased they have defects that consumers would never accept if purchasing large choice purchases such as a car. (APPG 2016). Add to this the cost of housing benefit which has risen eight-fold since the early 1980s and is set to cost the public purse £23.4bn in 2018 -2019. (OBR 2018)
UK Construction has lagged the wider economy. From 1994 to 2014 there was a 9% increase in productivity in construction, but a 25% increase for the wider economy. (Green 2016) Highlighting the necessity to modernise and increase productivity is not new. The Latham (1994) and Egan (1998) reports sought to identify efficiencies by drawing on experiences of other industries such as manufacturing to make the industry more responsive to customer needs and increase output. Since those seminal reports the construction sector has not closed the gap on another UK sector (Figure 1)