Will Building 1.5 Million Houses Solve Britain's Housing Crisis?

Labour’s housing plan may partially alleviate the Britain’s housing crisis. However, it will not solve it completely as supply is only a small part of the complex issues within the property market.

Affordability - The UK is facing an affordable housing crisis, characterised by soaring costs. Theoretically, increasing the supply of housing will lower prices but countless landlords and developers are reluctant to do so. Consequently, last year, the number of empty homes in London peaked since the financial crisis, despite the high demand, showing that simply increasing supply is not the right solution.

Last year, empty homes in London peaked, despite the high demand, showing that increasing supply is not the right solution

Speculative Buyers - Speculative buying and the buy-to-let market exacerbate the housing crisis. If 1.5 million houses are built, what stops investors from buying them as assets rather than places to live? Unfortunately, simply building homes is no longer enough as there is no guarantee that these will reach first-time buyers and low-income families.

Regional Disparities - High-demand areas like London lack space and face high costs, limiting housing affordability. However, rural areas with an abundance of space lack the social and economic infrastructure to make living there attractive. Despite recent shifts towards commuting and remote working, building 1.5 million houses alone cannot fully address the complex regional disparities contributing to Britain’s housing crisis.

There are a number of problems with the idea of simply building more homes in order to ease Britain’s housing crisis. However, if managed correctly, building a large number of homes can at the very least go a long way to solving the crisis.

Landlords - It is often argued that building homes will fail to lower prices because landlords and developers will simply keep charging high rents or prices. However, it is immoral to price people out of a place to live and this is exactly what many landlords do in the pursuit of profit. Therefore, if a plan to build houses could be combined with regulating or even abolishing them, we could go a long way to solving Britain’s housing crisis.

If a plan to build houses could be combined with regulating landlords, we could go a long way to solving Britain’s housing crisis

Planning Laws - Housing developers in the UK currently face very stringent planning restrictions that slow down the building process. This favours the larger developers because they can buy up large amounts of land, knowing that the majority will be granted planning permission. Easing planning restrictions as part of the plan would bring smaller developers into the market, making it more competitive and thus bringing prices down. It may also allow developers to build on previously unexploited land such as “wasteland or low-value warehousing.”

Addressing Regional Disparities - Currently, many areas of the UK have plenty of space for development but lack the demand whereas others have excess demand but too little space. Building houses in areas where there is more space while supporting job creation there can address population and therefore housing demand imbalances between regions. This would make house building in regions with more space much more effective.