Support 100 years of independent journalism.

  1. Politics
9 February 2017updated 30 Jul 2021 11:03am

The solution to the housing crisis is under our feet

If we can bring down the price of land, homes can be built at lower costs and sold at lower prices.

By Anne baxendale

The recent housing White Paper won’t solve the housing crisis but it does represent an important shift in terms of housebuilding in one key area – land.

The reason millions of families across the country are struggling with a lack of genuinely affordable homes comes down to problems with the land market. It’s popular to say ‘there’s no silver bullet’ in fixing our housebuilding crisis but there is one key solution, and it’s right under our feet.

Currently, housing developers are forced to compete for land – which is scarce – and so pay huge amounts of money for it. This can only then be retrieved if the homes also sell for huge amounts. This is why it’s called the ‘speculative system’ of housebuilding – because it relies on the developer to speculate on the price of houses in order to buy the land.

And in a double blow to people suffering at the hands of the housing crisis, these homes will often not only be expensive but they’ll be built very slowly – as fewer houses means higher prices. That means developers can eventually make back the whacking great costs they paid for the land, plus a tidy profit on top.

When set out like this, you can start to see why there’s so much nimbyism (communities who don’t want new housing in their area). With land prices so astronomical, developers have to compromise on quality, affordability, parks, roads and other infrastructure from the get-go.

Select and enter your email address Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. Your new guide to the best writing on ideas, politics, books and culture each weekend - from the New Statesman. A weekly newsletter helping you fit together the pieces of the global economic slowdown. A newsletter showcasing the finest writing from the ideas section, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Sign up to receive information regarding NS events, subscription offers & product updates.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

In a nutshell, if you can bring down the price of land this allows for homes to be built at lower costs and sold at lower prices – while being better quality.

Content from our partners
How to navigate the modern cyber-threat landscape
Supporting customers through the cost of living crisis
Data on cloud will change the way you interact with the government

The government haven’t quite nailed this in the housing White Paper but they have changed tack and started to take some action on land.

For example, they’ve said that public land will no longer have to be sold to the highest bidder, a practice that just creates higher land prices. This means local authorities could now have the opportunity to invest in projects for the long term including better-planned new homes, built primarily for communities rather than profits.

The White Paper has also started to look at giving more powers to local authorities to take land off developers who are hoarding it rather than building on it.. But we need to keep making progress on this for it to really make a difference.

Finally, there are some really promising suggestions around making data more widely available on land: who owns it, who’s interested in it and what its boundaries are. Because, believe it or not, much of this is really hard to find out – the land registry system is inefficient with different bits of information stored in different places and you even have to pay to access it. This stifles competition from smaller building firms and makes the land market opaque.

These proposals are still pretty tentative but they represent the government rightly starting to connect the need to fix the housing crisis with the need to fix the land market. The two are inextricably linked. 

We at Shelter will be continuing this conversation in March when we will set out an entirely new model of civic housebuilding which is focused around building homes for communities, not as investments. Only by transforming the land market can we build the genuinely affordable, high quality homes that communities actually want and need. 

Anne Baxendale is head of policy, public affairs and research at Shelter.