Meeting the Housing Challenge: British Experience, European Lessons

The current housing agenda in Britain is characterized by a spectacular and jarring disassociation: between a lot of analysis of serious problems, and an apparent inability to entertain or adopt credible solutions. Other parts of Europe struggle with many of the same problems, and seem to have developed different and sometimes (though not always) more workable responses.

The idea sprang out of an exchange with the late great Peter Hall. In the last e-mail he sent me, not long before he died, he raised:

‘a point I’ve recently been ranting on about: that we simply don’t know enough about other countries’ policies. Some obvious questions…: How successful or unsuccessful were the Pathfinders? Insofar as unsuccessful, where and why? Was experience in Nelson different from Liverpool?  Why are we stuck on housebuilding while the Dutch built 455k new units in just over 10 years? Now many are in negative equity … was that the (independent) result of the 2008 crisis? How come the affluent Germans are happy renting their homes, and what has that to do with the flow of capital into productive industry we keep hearing about?’ (and so on…)

Well, he’s not around to read them; but answers, or at least thoughts, on some of these questions are between these pages.

So this issue of Built Environment looks at housing markets, housing development and housing policies in both Britain and its continental neighbours. This is potentially a huge topic: in terms of the geography and the variety across it, and in terms of the range of questions and answers that are involved. So we have adopted a four-part thematic approach to structure our contributors’ assessments in a way which is unashamedly biased towards understanding and illuminating the British agenda in particular. They cover a very wide range of issues and settings, and we are very grateful both to the authors who have risen to the challenge we set and to the (necessarily anonymous) colleagues who have peer-reviewed the contributions.
We start with the ‘Big Picture’ in Britain. Glen Bramley reviews housing need and housing demand, the trends and the household characteristics, and what is happening on the supply side to try and meet them. Toby Lloyd and Pete Jefferys of Shelter then draw on the work they have done with the KPMG consultancy to analyse the ‘stuck’ and problematic nature of the housing situation in Britain, and its links to land, finance and urban planning.

It’s worth saying at this point that ‘Britain’, ‘the UK’ and ‘England’ are not now at all the same thing, if they ever were; and that they are getting to be less the same thing in terms of domestic policy with every passing year. Much of the focus here is on England, because that is where the problems are the most acute, and where the ‘spectacular and jarring disassociation’ is at its most extreme.

The second theme is then a review of some Key European Experience. Housing markets and policies in Germany and in the Netherlands seem to be perform less inadequately and erratically than those in the United Kingdom. Florian Urban reflects on the importance of the rented sector in Germany and – even more strikingly – on the cultural and historical underpinnings of that importance. Building on that, Kath Scanlon’s recent research is then the basis for a comparison of the private-rented sectors in Germany (Berlin), England (London) and the USA (New York City), exploring the attitudes and behaviours of middle-class families who have – on the face of it, at least – more choice than the trapped households in the lower end of the rental sector. Frank Wassenberg outlines the key characteristics of the Dutch housing scene, with some striking similarities and equally striking differences when compared with the British scene. These are broadly positive stories, and possibly a source of positive ‘lessons’ too. In contrast, the economies of Ireland and Spain suffered badly from housing crashes from which they are only slowly and painfully extracting themselves, as Michelle Norris and Michael Byrne show. This was not a random or inexplicable accident: the housing boom/bust cycle arose from macro-economic policies which saw asset price growth as underpinning rising demand and economic growth: ‘asset-price Keynesianism’. The temptation to use housing as an economic or financial tool, rather than just to meet housing need, is one of the stories of the last two decades. Evidence, too, that rapidly increased new supply did not really bring down prices – suggesting once again that whatever the housing sector is, it is not a market where conventional classical economics is likely to offer a predictive guide to outcomes. Then, looking specifically at social housing, Christine Whitehead gives an overview of the shared trends and distinctive national features of this important sector across Western Europe. Hard choices, but a clear need for government to use its powers in the area for the common good.

The third theme turns back to Changing Britain, and looks at specific parts of the housing environment: first, a part where change is at its most dynamic – the private rented sector, explored by David Rhodes; then a part where it is surprisingly un-dynamic – the private housebuilding industry, drawing on research by Sarah Payne into the performance of this risk-averse industry on which so many government hopes are pinned; and finally a part where a major government initiative (in the Labour years) sought to tackle declining inner-city housing with a regeneration strategy that looked to a wider frame than just housing itself: the Housing Market Renewal ‘Pathfinders’ whose history and lessons are assessed by Ian Cole.

The fourth and last theme, Places and Homes, switches to the built environment itself. What housing is being built? What places are being created? How can we do better? There’s an interesting question about why, in the words of the eminent transport planner Tim Pharoah, we in Britain ‘have the best guidance in Europe, and the worst practice’. So Richard Simmonds, former Director of England’s Commission for Architecture and the Built Environment, and Karin Krokfors, of ark in Helsinki, reflect on the quality and sustainability of the homes and environments that Scandinavian practice – in Finland, Denmark and Sweden – has been producing for decades. And Rachael Unsworth takes a specific opportunity, in the inner-city part of Leeds in Northern England, as the basis for a challenging look at how we could open up new housing options and lifestyles for a range of household types, while reducing resource use and associated pollution – positing the design of an exemplary neighbourhood where future urban dwellers would be able and willing to live, work and meet a wide range of requirements.

What the papers in this collection indicate is that there are things that we could do that would help solve some of the seemingly intractable problems that face the British housing system; but it seems that current trends and policies are as likely to be moving us in the opposite direction as in the right one. The flood of overseas equity into the London and South East market; the reliance on a model which combines rising house prices, stimulation of demand and inaction on the supply side; a situation which is forcing large numbers into a private-rented sector which they do not trust and where the controls which make it acceptable in Germany do not exist; the assumption that extreme deregulation and private-market responses will restore equilibrium and meet demand; much of this suggests that, in the immortal words of my family doctor in 1950s Lancashire, ‘it’ll be worse before it gets better’.

A realistic and evidence-based strategy for British housing might start from a recognition that the cessation of publicly-funded housebuilding is one of the foundations of our current crisis – because the private sector could never fill the gap. It should also recognize that without a mechanism for getting hold of land on which housing can be built without having to pay for landowners’ hope value, very little will be affordable. It should ensure that the land-use planning system operates in a strategic way to provide enough land for housing whilst protecting environmental value – a balance which recent reforms have actually made more difficult. And it should look in a cool clear open-minded way at what has, and has not, worked for our near-European neighbours, whilst allowing for cultural and historical differences.

This is, of course, an effort that we have tried to make in this issue. But the zeitgeist in Britain – well, in England, anyway – is a long way off that mind-set, and current government policies are as likely to be damaging as to be helpful to a housing recovery agenda. The prognosis, frankly, is pretty grim.