Torsten Bell from the Resolution Foundation asserts that building high price luxury properties paradoxically helps those further down the income scale, that building more houses is really good for everyone.
But this is flawed. In cities such as London, luxury properties are often bought by people who are not moving up the property chain – and thus providing a property for someone else – but are investors/second home owners from outside the UK.
In Cornwall there is a similar situation where luxury houses are often bought either as residences or second homes by people from outside Cornwall. Thus there is no property which is freed up. And this also misses a fundamental point. It is only the affluent who can afford such properties, they are out of the reach of most people.
The argument put forward by Torsten Bell is simply an excuse to build more houses and does not accord with the need to look at the composition of new build.
What is required is a more radical approach – you only build houses to meet the needs of people in the area who can afford them, and that means not building luxury properties.
But the lasting impact of construction goes beyond the immediate effect of who moves into that property, with the new owner moving out of their existing home and creating an opportunity for someone else. As that continues, it means building in one area can help reduce costs elsewhere.
Examining new builds in the centre of the Finnish capital, researchers show it’s the better-off who move in. But they go on to track the moving chains that follow and surprisingly swiftly see those on lower incomes and from lower-income neighbourhoods joining the chain. Only 20% of those moving into new city-centre buildings are from the poorest half of the population – but that share reaches 50% once you’re five moves down the chain.
So there are citywide benefits to increased housing supply, even if it happens in the centre. Crucially, that’s most true where cities are less segregated, so different groups move between areas and social housing developments ensure the benefits are spread faster. So we shouldn’t be opposing development – we should be building inclusive cities.
The problem is that we have the wrong sort of housing – second homes/ holiday lets/ luxury properties – and not enough affordable and social housing. We need to change the shares not the total number.
[Paul Cheshire always says we need to build more houses, regardless of the evidence!]
The copper-coloured afternoon light turns a deep blue as it streams through the stained-glass windows of All Saints’ church in Tudeley, near Tonbridge, Kent. Visitors come from all over the world to see these colours falling to the floor because All Saints’ is the only church in the world where all the windows are by the modernist artist Marc Chagall. But those heavy, aquatic blues sliced through by white figures could soon shine a little less if a new nearby “garden village” – a mile-long estate of 6,500 houses – gets the go-ahead.
Tudeley is far from alone. A series of garden villages and towns – and one “garden city” at Ebbsfleet – is being planned on greenfield sites and protected areas of outstanding natural beauty (AONB) across Kent. In a county known as the garden of England, this has caused uproar.
Like much of Britain, Kent has a shortage of housing and social housing. In Tunbridge Wells there were 897 families on the waiting list in 2021. According to Paul Cheshire, professor of economic geography at the LSE, “It’s almost impossible to provide land for new homes [around Tunbridge Wells] without releasing some green belt land. So much of the area is either green belt or AONB.”
The House of Lords report ‘‘Meeting housing demand’,is fundamentally flawed.
It supports the 300,000 housing target without question. The only ‘evidence’ is from pro-house building witnesses. [Why was Ian Mulheirn not included?].
Figure 2 which shows house completions and prices does not mention that high house building rates post war were to replace bombed houses etc.
No reference to the evidence from sources such as the Bank of England who state that lack of supply is not the cause of rising prices. House prices are assets, with low interest rates house prices rise.
A degree of blaming the old for hoarding space!
No reference to second homes or holiday lets which account for a significant element of property, especially in Cornwall.
Various mentions of people living in expensive private rented accommodation – fine but you do not need to build more social housing to deal with that. [If you do what happens to the empty private housing?].
We will need 3.7 million homes over the next 25 years – that’s 148,000 a year, why then build 300,000?
All in all a report which does not add to our understanding of housing issues. Yes there is a crisis but that reflects the misuse of housing and other policies which make it hard for those on low incomes to obtain suitable housing. We need a different mix of housing – more social, more affordable; less holiday homes/lets and luxury homes.
Odd how people in the property sector never look at the real reasons why house prices are rising. No mention of holiday homes, second homes, buy to rent or investments!! A number of people have cash to splash on housing which makes the situation worse.
Pent-up demand could keep house prices high in 2022, argues Gareth Lewis, commercial director of property lender MT Finance: “Although many people have made their move, there is still plenty of pent-up demand, which will keep property prices high. An easing of stamp duty for downsizers looks increasingly necessary in order to encourage them to move, free up larger family homes and keep property price growth at a more manageable level.”