Britain does in fact have a housing shortage

One Labour MP wants to break the Planning and Infrastructure bill. His arguments don't add up.

The speed at which Labour have converted to the YIMBY cause is remarkable. MPs like Dan Tomlinson and Chris Curtis are some of the most pro-building MPs Britain has had in decades. In less than a year, Labour have made some big moves on housing. Many YIMBYs I’ve spoken to were genuinely surprised by just how radical the ‘grey belt’ changes were. And what’s really heartening is that the Government is not declaring mission accomplished just yet. The Planning and Infrastructure bill goes even further and makes some vital reforms that will prevent well-meaning (but ultimately counter-productive) environmental red tape from gumming up the system.

In a previous post, I warned about the risk to the Planning and Infrastructure bill from nice-sounding, but fundamentally dangerous amendments. One Labour MP, Chris Hinchliff, has put forward a number of amendments that would gum up the planning process and create massive legal risk.

For example, one amendment would rewrite the admittedly flawed ‘call for sites’ process for local plans with one where the council themselves selects sites in line with the UN’s 17 Sustainable Development Goals. Is there a better example of everythingism?

Another dubbed ‘the Nimby Right to Block’ would allow people to appeal successful planning applications. Keir Starmer pledged to ‘bulldoze the blockers’, but if one of his MPs’ amendments were adopted they’d be stronger than ever.

Hinchliff also has the new strategic approach to environmental protection in his sights. One of his (many) amendments would make it much harder to put environmental delivery plans into place, while making using them much less attractive to developers.

Before becoming an MP, Hinchliff worked for the CPRE, an initialism which might as well stand for the Campaign for the Prevention of Real Estate. And it appears Hinchliff is fully onboard with the CPRE line on housing. On his campaign website, he listed stopping “Boris Johnson's attempt to deregulate the planning system created by the Attlee Labour government” as a key achievement. And he seems to see anyone who disagrees with him as paid shills.

Why is Hinchliff pushing so many anti-development amendments? His recent op-ed in The House is instructive: Hinchliff doesn’t believe Britain has a shortage of housing. And he thinks he has the numbers to back it up.

“But there is a key limitation in its approach: a narrow focus on increasing housing supply, when we already have substantially more homes per capita than we did 50 years ago.

In 1971 we had roughly one dwelling for every three people in the UK. Today there is one for every 2.2 people. Yet since 1971 UK house prices have risen by 3,878 per cent. England has seen 724,000 more net additional dwellings than new households since 2015.”

It’s a superficially attractive argument, but there’s a lot wrong with it.

We have fewer homes per capita than almost all of Western Europe. Hinchliff points to dwellings per capita numbers, but neglects to mention that in 1955, the UK had a ratio of dwellings per person that was 5.5 per cent above the European average. It is now 8% below the European average. In fact, Britain has the fewest homes per capita of any large Western European country. Hinchliff mentions that we have one home for every 2.2 people, but he neglected to mention that France has one home for every 1.8 people. And that Britain is 5.6 million homes short of having the same homes per capita numbers as the average of France, Germany, Spain and Italy.

The homes we have are small by international standards. Hinchliff isn’t making an apples to apples comparison. Brits have less floorspace per dwelling than almost all European nations. When we look at it on a per capita basis, it’s stark. The average English person gets 38 square metres. In the US, they get 72 square metres. Now, the US is a big country with a lot of space. Our island is crowded by contrast. Yet, residents of an even more crowded island, Manhattan get roughly the same amount of space (36 square metres). Londoners get even less by the way.

Quality matters too. In 1971, housing was far from abundant in Britain. As YIMBY campaigner and Labour activist Kane Emerson noted on X/Twitter, around one in ten Brits didn’t have an indoor toilet at that time.

The number of households depends on the number of homes. Hinchliff doesn’t rely solely on dwellings per capita numbers. He also refers to household numbers stating ‘England has seen 724,000 more net additional dwellings than new households since 2015.’ The problem is that when housing is expensive people economise and one way of economising is multiple people sharing the same house. If more homes were available, fewer adults would be living with their parents, fewer would be sharing a family home with strangers they met on the SpareRoom, and more would be settling down to have kids (something that’ll eventually lead to more households being created).

Location, location, location. The biggest problem with Hinchliff’s piece is that it looks at housing supply solely as a national problem. But Britain’s national housing shortage is best understood as a collection of local shortages. London, in particular, has a particularly acute shortage:

• Floor space per person for London’s renters has fallen to just 25 square metres.

• A one bed in London is more expensive than a three bed in any other part of the UK.

• Londoners earn around 15% more than the national average. But after you take into account housing costs Londoners only take home 1% more than people around the rest of the UK

• For every 10 jobs London has added in the last decade, the capital has only built three homes.

The problem is our planning system has made it extremely difficult to build homes where the demand is greatest. Our system of housing targets based on population growth (rather than market demand - something that recent changes are fixing) means there’s little relation between where new homes are built and where demand is. As a result, the places with the strongest local economies have not been able to expand and seen much bigger prices.

This, by the way, is also strong evidence against supply deniers who blame monetary policy for high house prices. Money printing and low interests does make assets more valuable, but if that was all that was going on we would expect everywhere to see similar rises everywhere. We don’t.

MPs will soon vote on amendments to the Planning and Infrastructure bill. There’s certainly room to improve the bill, but there’s a big risk that bad amendments are adopted that undermine the bill’s aims and only serve to generate more delays and red tape. MPs should know that the amendments’ backers are relying on fundamentally flawed arguments that deny a simple reality: Britain needs more homes.