Participants in your roundtable on housing (11 March) all assume that, if new housing is built faster than the projected net growth in households (ie about 220,000 to 250,000 a year), all will be well. This is simply not the case: new building provides only about 10% of the annual flow of housing. In fact, about 90% of the homes people buy or rent each year come from turnover of the existing stock. New households (overwhelmingly the young) rely for homes on “churn” at the cheaper end. The existing stock grows slowly (220,000 a year is about 1%), so the overall market supply and prices are barely affected by the number of new buildings.
Because the overall housing supply can grow only very slowly, London’s frenzied and unbalanced growth in jobs is pushing the price of housing to crazy levels. This is a train crash in slow motion: growth will hit the buffers when the labour supply is choked off by the housing shortage. Long before we reach that point, irreversible economic, social and environmental damage will be done, made worse by the policies being pursued now to boost new building.
If we are to avoid this outcome, we must rebalance the geography of the UK economy between London and the rest of the country. This will be difficult, but a lot easier than clearing up the mess if we carry on as we are going. George Osborne’s “northern powerhouse” idea was late in coming, but could perhaps be the seed of an answer.
Alan Wenban-Smith
Birmingham
• There are millions waiting for affordable homes and yet the people round your table offer no solutions. Perhaps I could suggest a couple. Bring back security of tenure for private tenants, and repeal the right to buy and help to buy (which is actually help to sell).
Henry C Pryor
Hay-on-Wye, Powys
