News Reviews from 2014

House building in UK

House price fears: what's the issue?

by Simon Belt


To be based on this article by James Heartfield

The Class Struggle and House Building

Leaders of all the Westminster political parties are agreed that Britain is failing to build the homes it needs, for households to afford on wages from employment. Though the political class have just woken up to the looming disaster, for decades they have been hostile to renewed house building. The housing shortage is chronic. It was also thought that Britain's high house prices were just an effect of cheap credit and that they would fall after the credit crunch. Even as astute a commentator as John Lanchester based the storyline of his novel Capital on the prediction that prices would fall (1) - but they are higher now than they were in 2008. Rents are following the inflation in house prices. There is simply not enough housing available to buy or rent, let alone "affordably".


The Demographia surveys of the major urban markets employ the “median multiple” to assess housing affordability. The “median multiple” is median house price divided by gross annual median household income, as recommended by the United Nations and World Bank. To rate as “affordable”, the cost of housing should not exceed three times gross annual household income. The “median multiple” should be 3.0, and preferably lower for First Time Buyers on lower wages.

To the Third Quarter of 2012 the 9th Annual Demographia International Housing Affordability Survey says that there are no affordable housing markets in the United Kingdom by that measure, including Northern Ireland. (2) Only Dundee and Falkirk in Scotland are "moderately unaffordable" at 3.7 and 3.6 respectively. Belfast at 4.4, Glasgow at 4.7, and Cardiff at 4.8, all manage to be "seriously unaffordable". The UK as a whole is "severely unaffordable" with a “median multiple” at 5.1. The regional differences are widening within a general predicament:

  • 8.7 Dorset
  • 7.8 Greater London Authority
  • 7.3 Devon
  • 6.8 London Exurbs, South East, and East Anglia
  • 6.7 Wiltshire
  • 6.2 Shropshire
  • 6.0 Cheshire
  • 5.7 Warwickshire, Bristol and Bath
  • 5.4 Edinburgh
  • 5.3 Merseyside
  • 5.2 West and East Midlands, and Tyneside
  • 5.1 South Yorkshire
  • 5.0 Nottinghamshire and Staffordshire
  • 4.9 Lancashire, Teeside and Durham
  • 4.8 Humberside and Greater Manchester
  • 4.5 Derbyshire
  • 4.1 West Yorkshire

The surveys are free to download from their website.

click here for Demographia

The signals are clear. According to Daniel Knowles at the Economist London is "turning inside out", with the inner city now increasingly reserved for the wealthy, while the poor are pushed out into declining suburbs. (3) Homelessness and overcrowding are increasing, and some people are living illegally in garden sheds, makeshift dwellings, and basements little better than caves. (4) These are the signals of an underlying production problem.

There are over 26 million households in the UK. There are 22.1 million households in England, 2.4 million in Scotland, 1.3 million in Wales, and 0.7 million in Northern Ireland. If each dwelling built were to stand for 100 years, then you have to build 260,000 each year just to renew the existing housing stock. The number of households is growing both naturally and through immigration, by about eight per cent a decade according to the 2011 Census. (5) That requires an additional 208,000 homes next year, increasing yearly. That is probably an underestimation because household formation is being frustrated by the high cost of housing. What is more the long term trend is for people to move South, where there are more jobs. There are empty homes in the North, while the need for more in the South is even greater. An additional 240,000 new homes a year, with most in the South, was the usual production target before 2008. Meaning that a total of at least 500,000 new and replacement homes should be built every year, with simultaneous demolition of the worn out and unwanted stock. (6)

Britain has never built at that rate of production and demolition. (7) The average built has been 192,713 over the last thirty years. Since 2008 the average rate of house building has fallen to 153,730, including many conversions of larger houses into smaller flats. (8) One way the problem was hidden was that the housing stock was left to age, which is why so much construction work in Britain is in laborious and unproductive repairs and extensions. (9) Much of Britain's unaffordable housing is both dilapidated and overcrowded, particularly where there is employment.

Director of Economic Affairs at the Home Builders Federation, John Stewart, predicted this predicament would happen. In his report Building a Crisis - Housing under-supply in England he was the first to highlight the growing housing supply crisis, and its social and economic consequences. (10) After extracts were published in 2001 in Sustaining Architecture in the Anti-Machine Age, (11) the full report was initially published online by audacity. We have deleted the online pages, but continue to carry John's pivotal and prophetic research:

clickBuilding a Crisis - Housing under-supply in England May 2002


The political Left and Right in Britain disagree about what the problem is. Labour supporters point out the collapse in the building of social housing since the early 1980s. That is part of the explanation. But the widely asked housing question deserves a better answer. It is not hard to understand why prices are so steep. No tenure of house building in the UK has failed to keep pace with demand. Housing starts in all tenures are slightly up after the crash, but overall they are woefully short of actual need. The reason is that Britain has among the most stringent laws on what can be built where - the "planning laws" dating from 1947.

You can own land in Britain, but you are not allowed to build on it unless you have planning permission. To show the difference, the value of a plot of land with planning permission is hundreds of times greater than the same area of agricultural land. Only a portion of the cost of housing is the value of the bricks and mortar, and the rest is the inflated value of the location with benefit of planning permission.

The prejudice against house building in Britain is extreme. It is backed up by a strong lobby of environmental and conservation groups. It appeals to the Right wing prejudices of the Tory shires against the urban masses; but also to a Leftish hatred of greedy developers. It plays on an ideological claim that the national identity is rural, enshrined in "this green and pleasant land". The popular fear that the countryside is about to be concreted over is strong, but unwarranted when 93 per cent of the UK is not urban, (12) as Mark Easton showed for the BBC:

clickHow little space we live in 12.07.2012

That developers want to concrete over the countryside is a bit of a myth, too. The so-called volume house-builders are happy building fewer homes, with higher profit margins on land approved within the planning system. Britain's overpriced housing market is plainly dysfunctional. Given the amount invested in the housing sector you would expect its output to be improving, not falling. But that is because the money is not going into house-building, which has been artificially suppressed. Instead all this cash only serves to bid up the prices of the limited number of dwellings on offer. Almost all of Britain's real estate business is not in the sale of new homes, but second hand ones. It is like Sotheby's.

Given that the sector is so dysfunctional, why will Britain not build enough houses? Because housing is always talked about in financial terms it is easy to imagine that the limitations on housing are financial, like some speculative trick to protect homeowners' investments. Realistically, though, there would have to be a massive increase in the number of homes built, over many years, before the accumulated shortfall was overcome, and prices started to come down. The real dampener on house-building is social - in particular the elite's fear of the social change that a mass house-building programme would lead to.

Fears of concrete spreading over England's endangered pastoral idyll are just fantastic representations of the threat of the masses to the elite. Those fears are not without foundation. Modern industrial society in England came about by dispossessing the yeoman peasantry from the soil. Proletarianisation was codified in the aristocratic monopoly over the land they cleared. The aristocracy thrived with industrialisation, but by the late nineteenth century had become increasingly indebted. The Settled Land Act of 1882 lifted the rule that aristocrats were only allowed to sell their land once within a generation. (13) A century later and aristocratic land ownership had fallen from four-fifths to just a quarter of the country. (14) Yet the working population is urbanised in less than 7 per cent of the UK in a planned divide between town and country.

click here for Ross Wolfe's series on the Antithesis of Town and Country

The liberalisation of land ownership, though, had some unintended consequences. After the First World War, when a lot of farm land was sold off, people started to buy it up and make their own settlements, outside of the established order. Developers built the homes that the returning heroes had been promised, cheaply for lower middle class Britons. Working class Londoners with happy memories of working summers picking hops in Kent fancied the chance to buy a little plot for themselves. Makeshift dwellings, little more than sheds, or sometimes remaindered railway carriages, sprang up on "Plotlands". (15)

Plot sales might chime with the theoretical goals of the free market, but it was an affront to the ruling classes and the sanctity of their pristine countryside all the same. From the mid-1920s the propaganda campaign against "uncontrolled" house building (uncontrolled by elites) was intense. People's new homes were decried as "ribbon development" or "bungaloid growth", and other de-humanising metaphors. The 1945 Labour government bought off Tory backbenchers fighting against a new round of "sprawl" with a compromise. Thanks to the 1947 Town and Country Planning Act development would be contained, with some in New Towns beyond the "Green Belt" around London and other cities. Post-war Britain was not re-built, but partied among the ruins.

Only later, in the 1950s, was there a new push to build. Then the Conservative Party was trying to prove itself the better friend of the people in a competition with Labour's municipal socialism. In the Cabinet Winston Churchill joked about Harold Macmillan's "rabbit hutches". But in the elections, when Macmillan had become leader, he made the case for a prosperous Tory Britain saying "you've never had it so good". Labour matched Tory promises, and the two parties were in a race to match the rising expectations of a new generation. Between them they stoked a great housing boom. Many people today are living in flats and houses built in the 1960s and 1970s. But from the point of view of the ruling classes it was a very dangerous strategy.

An army of builders had to be drummed up to build the houses.

Working for a few weeks here and there building workers have not found it easy to organise - but the practical side of the construction site gives them a clear idea and even control over the work process that eludes workers in more complex industries. When they were in demand in the post-war house building boom, they got a lot more confident. Communist Brian Behan went to work on the South Bank in 1959, thinking '.... Four thousand men, five years a-building. Link them to the Isle of Grain, the Atomic power station at Bradwell, and had an army of 12,000.' (16)

Harold Wilson's Labour party started to withdraw funding for public housing in 1968. Annual housing production in England, Scotland and Wales peaked at 413,714 new homes, (7) or 425,830 for the UK when including Northern Ireland. (8) Edward Heath's Conservative government was in power, strengthening anti-Union legislation, and fighting strikes in several sectors. The unemployment rate reached the headline figure of a million in 1972, the highest level for more than two decades. By 1972 Des Warren, Eric "Ricky" Tomlinson, and John McKinsie Jones were part of the army engaged in the National Builders Workers Strike. They were among the "flying pickets" who had brought building to a standstill for weeks on hundreds of building sites up and down the country. They were fighting poor pay and conditions, calling for a minimum wage of £30 a week, and for an end to "The Lump" - the system of casualised labour in construction. (17)

National Building Workers Strike for £30 in 1972

Not just the men that built the new houses and flats, but the people that moved into them were changed. The old traditional community ties of the Edwardian working class communities gave way to a modern industrial sensibility. The dockers' leader Jack Dash moved into a tower block, as a result of slum-clearance and road-widening under the Greater London Plan - 'I chose a flat on the sixteenth floor which has a panoramic view of east London and the Thames'. Dash looked over East London and dreamed of a socialist Britain: 'I get a feeling of confidence' (18)

Gathered in new associations, moving away from extended families to nuclear family homes and flats, the sixties' working class was a lot more confident, and less subservient than the preceding generation. Elite reaction against this new social order fixed on tower blocks and council estates - along with the Secondary Modern School and television - as emblem of everything they feared. (19)

Completed in 1972, Erno Goldfinger's 31-storey Trellick Tower was the favourite focus of tabloid scare stories: Women raped in elevators, children attacked by heroin addicts in the basement, and homeless squatters setting fire to flats were among the more lurid. It is based on his earlier and slightly smaller Balfron Tower, central to the Brownfield Estate in Poplar, East London. Today Balfron Tower is a Grade II listed building and Trelick Tower the higher Grade II*, all within their conservation areas. Ian Fleming called his master criminal Auric Goldfinger, having failed to stop Goldfinger building 1-3 Willow Road in Hampstead, North London. Number 2 became Goldfinger's own house, and is now owned by the National Trust.

Alongside union militancy, wage inflation, and pop culture, the new housing estates were a part of what the elite experienced as a "crisis of rising expectations": too many demands on employers and the state, that they wondered whether they could meet. The building boom of the sixties had gone sour. To a fearful elite the new estates looked intimidating, like no-go areas. Some were, like the Divis Flats in Belfast, the Irish Republican Socialist Party stronghold known as "the Planet of the IRPS", and the Broadwater Farm in Tottenham, after rioting black youngsters fought back against a police incursion, killing PC Keith Blakelock in 1985.

Having actively sought popular support in the sixties, politicians set out to dampen those rising expectations in the 1970s. Five months after the National Building Workers Strike had ended 24 flying pickets were arrested and charged under the 1875 Conspiracy and Protection of Property Act with over 242 offences between them. They included unlawful assembly, affray, intimidation, criminal damage and assault. The 24 were split up into three groups and tried in separate trials, which was unusual given that the charges against them all arose out of the same set of circumstances, on the same day, on the same building sites in Shrewsbury. (20) For their leadership Warren, Tomlinson, and McKinsie Jones were singled out, but all were arrested and put on trial between 1973 and 1974. Speaking from the Dock, Warren said:

'It has been said in this court that this trial had nothing do with politics. Among ten million trade unionists in this country I doubt if you would find one who would agree with that statement. It is a fact of life that Acts of Parliament have been passed and picketing and strikes are looked upon as a political act.' (21)

Des Warren and Eric "Ricky" Tomlinson fighting for justice for the Shrewsbury 24

Warren was sentenced to three years, Tomlinson to two, McKinsie Jones to nine months. Arthur Murray, Mike Pierce and Brian Williams received smaller sentences, while eighteen were aquitted, all having been abandoned by the Trade Union Congress. The TUC ignored them again in 2007 in their ongoing campaign to expose the truth of the political trials.

click here for the official Shrewsbury 24 Campaign

The Labour Party failed to defend the Shrewsbury pickets while in opposition, and in government offered workers only wage freezes and Social Contracts. Construction firms financed the Economic League to maintain a blacklist to tighten up the surveillance of union activists. The Consulting Association was established in 1993 as a successor to the Economic League. That well funded effort at construction industry blacklisting was not wound up until 2009, with a £5,000 fine.

The Conservative Party grew in confidence as the working class challenge faltered through the 1970s. In power after the 1979 General Election, Margaret Thatcher's Conservative government directed the housing question away from growth to meet rising needs towards that of owning the legal title. It was without doubt a popular move, playing on the frustrations of tenants with distant and patrician housing departments. But it also meant that the game had changed from baking a bigger pie, to changing the way it was sliced. No more council houses were to be built, while financial deregulation championed by Nigel Lawson meant cheaper credit - more money chasing fewer homes. That led to the "Lawson boom", and then a housing market crash in 1989.

The Labour Party kept its commitments to growth, on paper at least. In 1985 Labour's Housing Minister Eric Heffer protested '... it is intolerable, too, that half a million building workers should be on the dole while half a million new homes are needed.' (22) Over time, though, Labour readjusted its goals to the new realities. When Tony Blair became leader in 1995, his main appeal to middle class voters was to shed the promises made to the core working class supporters. Blair dropped housing growth, and simply outsourced the party's policy to Lord Richard Rogers' Urban Task Force and their imagined Urban Renaissance. (23)

Where the Labour governments of the 1960s were beholden to working class aspirations for housing, the New Labour administration in 1997 left its housing policy in the hands of enthusiasts of New Urbanism and Ecology. Rogers and his advisor Anne Power had lots of ideas about intelligent design, but were prisoners of that same distaste for building on green fields that drove the intelligentsia to denounce ribbon development in the 1920s. Rogers convinced London Mayor Ken Livingstone and the Labour leadership that you could "build up, not out"; that all needs could be met by new building on brownfield sites, without any impact on the countryside. But no amount of intelligent design disguise that this was a recipe for standing still.

clickWhere to build? 19.03.2011 9.0Mb Download pdf

It was and is not possible to meet Britain's growing housing needs without building on any new land. The collapse in new building that had started in the late 1960s, set in during the 1970s, but which became identified with the policies of Thatcher's Conservatives in the 1980s and 1990s, was not reversed in the 2000s.

Today's politicians are reacting to a problem that was laid down over the last three decades, and whose symptoms are unavoidable. That the problem has at last been acknowledged after years of denial is all to the good. But reversing the problem would necessarily mean great social upheaval, just as it did in the 1920s and again in the 1960s. Building the millions of new homes needed would mean mobilising a large workforce, with support industries and resources to back it up. That would be challenge enough, but building millions of new homes would also mean changing millions of peoples' lives. The current divide between town and country would be substantially re-drawn; new towns built and new communities gathered together.

All of these things need to happen, to reverse the stored up problems of the British housing market. Building new towns and housing estates would be a great opportunity for better homes and lives - but the governing classes are likely to quail at the consequences.

Labour Power

Since 1996, and John Selwyn Gummer's unanswered question Where Shall We Live?, (24) successive Ministers and Cabinets have been convinced of the mathematical case for new housing. They have been unwilling to allow countryside to be used for building or mobilise the army of builders required. In 2003 and 2005 Kate Barker was commissioned by John Prescott and Gordon Brown to look at house building and land use. The 2003 "Growth Areas", which included the proposal to build the Thames Gateway along the Estuary, Yvette Cooper's Eco-Town Competition in 2007, followed by Grant Shapps' too cautious liberalisation measure in 2010 - in each case Ministers tried to address the problem, only to see their proposals amount to little actual house building. Neither did the planning constraints result in the Urban Renaissance that Rogers and Power dreamt of, unless they meant it to be "severely unaffordable".

The inertia in the complex of monopolistic developers, a planning system with a bias against growth, and lobbies against change, is deeply entrenched. The "not in my back yard" outlook is well organised, but the young people who lose out are not. To get the change we need with an army of builders would mean a great shift in the outlook of the country away from conservatism, in favour of growth.

It has to happen, but we should not underestimate the challenge.

James Heartfield 30.12.2013

Join the Salon Email List
Youtube Video of discussion on Energy
RSS Feed for discussions
Manchester Salon Facebook Group
Manchester Salon Facebook Page
Manchester Salon on Twitter