Proposals in the Lyons Housing Review provide a roadmap for delivering the right type of housing in the right location
Housing issues facing the UK have changed markedly over the last 20 years. There are fewer physical problems with housing stock, but more concerns over affordability and the environment.
After the recovery from the global financial downturn, the underlying policy issues of rapid house price inflation and market bubbles, high demand for owner-occupation, restricted land supply, and relatively few new-build programmes in the social sector are resurfacing.
Boom-and-bust housing cycles have long challenged governments. However, the affordability crisis has become aggravated over time. Figures from the second quarter of 2014 show that the average UK house price is about £186,000, but over £400,000 in London. This represents an 11.5% annual increase for the country and over 25% in London. Considering the average starting salary for graduates is about £20,000 and slightly more in London, it is no surprise there is an affordability crisis. Even in supposedly more affordable Manchester, average prices range from £613,000 in Bowden to £78,000 in Gorton; which means that only the university’s vice chancellor can afford to live in Bowden and no graduate can even afford a property in Gorton's most deprived area.
The difference between the ‘haves’ and ‘have nots’ is all about access to property ownership, as well as inheriting from family members who accumulated housing wealth through price inflation. This is the right time to have a grown up debate about how to tackle a housing crisis that, if left unchecked, will damage the life chances of our future generations. The recent report of the Lyons Housing Review provides a roadmap to stimulate debate and action from government and stakeholders at all levels.
The review, under the leadership of Sir Michael Lyons, provides a comprehensive package of policy levers and instruments that will help to make a step change to deliver the right type of housing in the right location.
As a spatial planner, I think there are two very powerful policy toolboxes. On the one hand, the opportunities for local authorities to designate Housing Growth Areas, New Homes Corporations and Garden City Development Corporations. Combined with improved compulsory purchase orders and tax incremental finance, these will allow more innovative approaches to increase housing supply. On the other hand, the proposed National Spatial Assessment, which would draw together the spatial implications of infrastructure and growth and economic development policies, the development of Housing Market Strategic Plans and the creation of a Housing Observatory to monitor trends in housing supply will strengthen the policy framework of housing delivery.
The last piece of the jigsaw is political leadership and commitment to tackling the housing crisis and delivering at least 200,000 housing units a year. While the creation of a cross-departmental housing task force and an independent Housing Commission will help, past experience suggests local politics and nimbyism can be millstones round the necks of those making ambitious housebuilding plans. Commitments can only be meaningful if financial resources are made available to tackle this entrenched crisis, a challenge for any government elected next May.
While we have to provide sufficient housing to places with the highest demand and needs, we should not lose sight of the win-win strategy of spatial rebalancing. Housing does not seem to enter the equation when we talk about the North-South divide. The rebalancing debate should not just be confined to the economic performance of the peripheral regions, but also the capacity of London and the Southeast to manage the growth pressures for sustainable development. With the election looming, it is inevitable that political schism will come into play. However, it also provides opportunities to deal with some thorny issues on resources and a strategy for the North.
Cecilia Wong is professor of spatial planning and director of the Centre for Urban Policy Studies at the University of Manchester. She was a member of the expert panel that advised the Lyons Housing Review
This opinion piece was first published in the November edition of Public Finance magazine
