We are not building enough homes, and we have failed to do so for many years. We have created a chronic and growing undersupply of housing in the UK, which is causing major problems for our economy and society.
Constrained supply contributes to rising house prices and housing market volatility, which makes the rest of the economy less stable and limits people's ability to move for work. The social cost of insufficient housing puts additional pressure on public services, such as the NHS and education, and perpetuates inequality. Individual households face overcrowding and an increasingly limited choice about where they live.
Successive governments have acknowledged the problem of undersupply and have pledged to build more homes. The coalition is introducing specific initiatives, such as the New Homes Bonus and the National Planning Policy Framework, designed to encourage sustainable development. But doubts remain about whether these measures will deliver the amount of housing that we really need. The lack of a strategic overview from the government puts their vision for delivering more homes at risk.
This gap in the government's housing policy was highlighted in our recent report, More Homes and Better Places, which reviews the impact and causes of housing undersupply. We found structural problems – land and planning, opposition to development, the operation of the construction industry – have been compounded by increased restrictions on finance and mortgage availability. The report makes recommendations for what a government strategy could look like.
Firstly, local authorities should take the lead in developing new places, from small-scale developments to entire new settlements. Councils are well-placed to perform this role: parcelling up land, granting planning permission and securing the provision of appropriate infrastructure. They also have the democratic accountability to ensure such developments are best suited to local communities.
Housing minister Grant Shapps used this website to argue the benefits of the garden cities, which combine "the health of the country with the comforts of the town". Though these settlements do not suit every location, much can be learned from these strategic approaches to development.
We can also learn from Europe, where a number of successful new settlements and neighbourhoods have been built. Vathorst, for example, is an environmentally and socially sustainable extension to the historic town of Amersfoort in the Netherlands. It was led by the local authority and has been highly successful, with substantial local support.
One of the advantages of local authorities playing a leading role is the potential to include smaller and community-based development models, such as co-operative housing and self-build. This will increase the quantity of housing delivered and encourage better quality, as these developments compete on more than price.
Another key part of the housing strategy must be to accelerate the release and the use of land. Although the draft National Planning Policy Framework has come under some considerable criticism, there is a clear consensus on the need to speed up and simplify the planning system. We believe planning regulations should be relaxed in certain areas, and taxes should be used to encourage the efficient use of land.
The government is in the process of devising a housing strategy for England, due to be published before the end of the year. Our report provides the guidance we hope the government will use to create housing strategies that have a real chance of succeeding – because a clear strategy is vital if the government's commitment to increasing the number of new homes is to be achieved.
Jim Vine is head of UK housing policy at the Building and Social Housing Foundation
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