Study say planning policy seems designed to 'keep urban unwashed out of the home counties'
More of Surrey is now devoted to golf courses than housing, according to provocative new research that claims to dispel many of the myths associated with Britain's housing boom.
A study by the Centre for Economic Performance at LSE suggests soaring house prices are not caused by an influx of foreign buyers but are down to restrictive planning policies that have ensured the country's green belt is a form of "discriminatory zoning, keeping the urban unwashed out of the home counties".
Paul Cheshire, professor emeritus of economic geography at LSE and a researcher at the Spatial Economics Research Centre, has produced data showing that restrictive planning laws have turned houses in the south-east into valuable assets in an almost equivalent way to artworks. He points out that twice as many houses were built in Doncaster and Barnsley in the five years to 2013 than in Oxford and Cambridge.
As a result of the policy that specifically safeguards green belts, Cheshire claims houses have not been built where they are most needed or most wanted – "in the leafier and prosperous bits of ex-urban England".
His comments will strike a chord with many who are struggling to get on the housing ladder, especially in the south-east. But they are likely to raise the hackles of environmental groups which fear the government is keen to promote a more relaxed planning environment at the expense of the countryside in order to meet the need for more housing.
Between 1969 and 1989, just over 4.3m houses were built in England, compared with 2.7m between 1994 and 2012. It is estimated that, in order to stabilise affordability, it is necessary to build between 237,800 and 290,500 houses a year. But Cheshire calculates that, between 1994 and 2012, building fell short of what was needed by between 1.6m and 2.3m houses.
"We have a longstanding and endemic crisis of housing supply and it is caused primarily by policies that intentionally constrain the supply of housing land," Cheshire claims. "It is not surprising to find that house prices increased by a factor of 3.36 from the start of 1998 to late 2013 in Britain as a whole and by a factor of 4.24 over the same period in London."
Once inflation is discounted, house prices have gone up fivefold since 1955. But the price of the land for houses has increased in real terms by 15-fold over the same period.
As a result, houses are becoming like investment assets, creating incentives to hold on to them in expectation of future price rises.
Cheshire lays into "supporters of urban containment policies who argue that Britain is a small island that we are in danger of concreting over", claiming it is a myth because green belts cover one and a half times as much land as all of England's towns and cities put together. "Moreover, there is little or no public access to green belt land except where there are viable rights of way," Cheshire says. "Green belts are a handsome subsidy to "horseyculture" and golf. Since our planning system prevents housing competing, land for golf courses stays very cheap. More of Surrey is now under golf courses – about 2.65% – than has houses on it."
He calculates that there is enough green belt land within Greater London – 32,500 hectares – to build 1.6m houses at average densities. "The only value of green belts is for those who own houses within them," Cheshire argues. "What green belts really seem to be is a very British form of discriminatory zoning, keeping the urban unwashed out of the home counties – and, of course, helping to turn houses into investment assets instead of places to live."
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