Thread
Our new @CentreforCities report proves Britain's housing crisis is much worse than you probably think. We're missing 4.3 million homes. To close the backlog in 25 years, England's 300k housing target needs to be increased to 442k, and in 10 years, to 654k. www.centreforcities.org/publication/the-housebuilding-crisis/
You're probably aware of two competing accounts of the root cause of the UK housing crisis.
1) the planning system established in 1947 is a bottleneck on new homes
2) the decline of council housebuilding
after Right to Buy in 1980
@watling_samuel and I set out to test these.
1) the planning system established in 1947 is a bottleneck on new homes
2) the decline of council housebuilding
after Right to Buy in 1980
@watling_samuel and I set out to test these.
We used two datasets to test these -
1) data on housebuilding in England and Wales going back to the Crimean War, and
2) a new dataset that we scanned from old United Nations statistical annals and assembled into spreadsheets on European housebuilding and housing after 1948.
1) data on housebuilding in England and Wales going back to the Crimean War, and
2) a new dataset that we scanned from old United Nations statistical annals and assembled into spreadsheets on European housebuilding and housing after 1948.
What we found is that housebuilding rates in England and Wales dropped by a third immediately after the Town and Country Planning Act 1947 was introduced, dropped by half again a decade before Right to Buy in 1980, and has then fallen gently since then. 
Even though council housebuilding increased after 1945, the 1947 planning system's restrictions on land caused private housebuilding to drop by more than half, and total housebuilding to fall from 1.9 to 1.2 growth per year.
The fall of council housebuilding is part of why we have a housing shortage today, but it began a decade before Thatcher, falling from 1.1% growth in 1968 to 0.6% in 1979, and occuring alongside a bigger fall in private housebuilding from 1.2% to 0.6%.
The low housebuilding rates of Postwar Britain (until 1979) were also low compared to other European countries. Britain had one of the lowest housebuilding rates in postwar Europe, and the lowest private housebuilding rate. 
Maybe Postwar Britain's low housebuilding rates were due to low population growth?
No, even controlling for population we built very little. This is also during a period when on avg 58k more people left the UK every year than arrived here - we just weren't building enough.
No, even controlling for population we built very little. This is also during a period when on avg 58k more people left the UK every year than arrived here - we just weren't building enough.
As a result, UK housing availability saw relative decline. This chart shows the number of homes per person, with the UK fixed at 100 every year. It shows every country gaining on us - as the UK's homes per person fell from 5% above the Euro average in 1955 to 2% below it by 1979. 
And postwar Britain could have built more council housing - both the Dutch and the Swedes show that more private and more social homes could have been built if we'd followed their approach. But... 
...the decline of council housebuilding in the UK was not unusual by European standards. Every country that used centralised subsidies to fund extensive social housebuilding programmes saw public housebuilding shrink at some point after 1970, including the UK. 
In sum - all this indicates that the Town and Country Planning Act 1947 was acting as a bottleneck on both new private AND new council homes. This was because it was *designed* to do so, especially in and near Britain's biggest cities. 
And to make things worse - the restrictive, discretionary planning system established after 1947 became even more restrictive from the 1960s onwards, as the initial local plans were exhausted and designations that blocked homes such as the green belt mushroomed across the land. 
Other European countries didn't have these problems with housebuilding in the post-war period - their planning systems were introduced later, were more rules-based, and didn't grant much power to councils to block new homes. 
However, after 1980, things changed in Europe. Housebuilding fell in nearly every country, and the rankings all changed - except the UK was still at the bottom.
The exception is Ireland, which built loads after 1980. But doesn't Ireland have a huge housing crisis today?
It does, but A) Ireland needed a huge housing boom after 1980 as it had fallen behind Europe and B) minimal building since 2010 has seen Irish homes per person plummet.
It does, but A) Ireland needed a huge housing boom after 1980 as it had fallen behind Europe and B) minimal building since 2010 has seen Irish homes per person plummet.
And while some countries since 1980 have continued to see housing availability go off into space, other European countries have stalled relative to the UK - but all have more homes per person than we do.
So what does this mean for housebuilding today? How many homes are we missing?
If we'd added homes at the rate of the average European country from 1955 to 2015, we'd have about 4.3 million houses, or 15% more homes than today. For some countries it's even higher - if we'd built at the rate of Finland, we'd have an extra 8.3 million homes, or 30% more. 
And this is all accounting for differences in population growth, our initial 'head-start' in homes per person - methodology available here: www.centreforcities.org/wp-content/uploads/2023/02/Methodology-The-housebuilding-crisis-February-2023...
So what would it take to close this gap? Ay current rates of building in England (220k, a historic post-1980 peak) ...We won't. We'll always have a gap, as that's what Europe is building at now, without a backlog.
The 300k target will close the gap - in at least 50 years.
The 300k target will close the gap - in at least 50 years.
If we instead focus on when we want to clear the backlog, some obvious targets come out. To end the housing shortage and get to European levels of housing availability in 25 years, we need to hit a housing target of 442k a year. For ten years, it's 654k new homes every year. 
How do we achieve this? First, by recognising that the planning system has been reducing the supply of private and social housing for decades. Social housing can help clear the backlog, but private housebuilding has to increase. 
And second, understanding that increasing housebuilding is a requirement for driving economic growth and ending Britain's period of relative economic and social decline. 
Practically - the 300k housing target for England has to increase. Even if we do hit it, it won't be enough. 
We can't hit a higher housebuilding target, and get substantially more private and social homes built without planning reform. We need to make more land available for more homes, and to shift from making decisions on land case-by-case to a rules-based system. 
More here on how planning reform and the shift from our current Town and Country Planning Act 1947 discretionary planning system to a new flexible zoning system: www.centreforcities.org/publication/a-very-short-guide-to-planning-reform/
And finally - there are some immediate things the new Housing Minister @redditchrachel should do to leave a positive legacy. 1) do not push the 'wrecking amendments' in the NPPF currently being consulted through into national policy and 2) be bold with the new NDMPs. 
The full report setting out the scale of Britain's housing challenges and our analysis is here - let me and @watling_samuel know what you think and if you have any questions.
And some of the report's bonus charts collated here by @yimbyalliance for the planning reform super fans!
My analysis on what our new report on Britain's missing 4.3 million homes means for Labour - housebuilding and planning reform have to be part of any serious growth strategy
My co-author Sam has his reflections in this thread:
As a sneak peak - the tables we've scanned and turned into spreadsheets look like this, discovered during Sam's time toiling away in the underground data mines (the LSE Library)
And my blog for @ConHome on how and why the Government should make progress on planning reform conservativehome.com/2023/02/22/anthony-breach-the-planning-system-not-thatcher-is-to-blame-for-the-h...
It would be so, so good. Britain with an extra 4 million homes is one of the best countries in Europe, with cheap, plentiful, high quality housing for everyone here today to enjoy. Squash the fields and turn them into homes.
My new report with @watling_samuel on the scale of Britain's housing shortage and the culpability of the 1947 discretionary planning system has been shared twice on Marginal Revolution - thank you @ATabarrok and @tylercowen! marginalrevolution.com/marginalrevolution/2023/02/britain-long-timeline-of-housing-decline.html
