Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      Government departments will look at cutting budgets to fund defence, minister says

      Getty Images collection showcasing diverse business professionals in a collaborative office environment, emphasizing teamw...

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      Can football conquer the US? Why culture is key this World Cup

      GettyImages 2281127577 featuring a significant news event or business setting, capturing key moments and interactions

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      The best places to eat sandwiches in Lisbon, from bifanas to pregos

      Bifana do Afonsos famous bifana sandwich showcasing tender pork in a freshly baked roll with savory sauce.

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Tuesday 16 April 2024 5:33 am  |  Updated:  Monday 15 April 2024 12:49 pm

Notes from a future where Britain has solved the housing crisis

By: Kristian Niemietz

Add as a preferred source on Google
Housing
Housing

In ten years’ time, high house prices and low supply could be a thing of the past. Kristian Niemietz offers a despatch from that brave new world…

The year is 2035 and according to provisional figures released today by the Office for National Statistics it is the tenth year in a row during which house prices and rents grew at a slower rate than wages. This is the result of the great British building boom, which has seen housebuilding rates soar to the highest levels since the 1930s.

The generation currently coming of age will be the first generation of Britons in a long time who have never known anything other than steady improvements in housing affordability. They have no active memory of Britain’s housing crisis, which used to cause so much misery among Millennials and Generation Z. It is therefore worth recapitulating how grim things used to be in the mid-2020s, in the bad old days before Britain’s housing revolution. 

Back then, Britain used to have an unusually low level of housing supply. Catching up with the EU average, in terms of the number of housing units per 100,000 people, would have required the construction of 3.4m additional homes in England alone. Britain did not just have fewer homes than other developed countries, but also unusually small ones. The average British home was only two thirds of the size of the average German, Dutch, Belgian or French home. 

No wonder, then, that Britain used to be one of the world’s most expensive places to live. The average house price in England and Wales was about eight times the average annual pre-tax salary for full-time employment. It was cheaper to rent a flat in Rome, Brussels, Vienna, Berlin, Helsinki, Bern or Oslo than to rent an equivalent flat in Oxford or Reading – never mind London, which was entirely in a league of its own. 

But it was not just residential housing that was in short supply, and therefore horrendously expensive. The same was true for business premises, be it for offices, retail space, lab space, pubs, restaurants, or anything that requires more than a minimum amount of space. 

The housing crisis was not just a problem for those at the sharp end of it. It made Britain, as a whole, poorer in countless ways. 

These problems had been well-researched and well-understood for quite some time. The Institute of Economic Affairs already got there in 1988, and with the Barker Review of 2004, the government finally got there too, even though it would take another twenty years until a government decided to actually do something about it. 

Read more

House prices will fall by two per cent this year – the most since the financial crisis

Rents have risen by more than a third since 2022

The full story is more complex but the gist is relatively simple: Britain’s discretionary land-use planning system gave too much power to Nimby obstructionists, who used their political muscle to block development. 

After the 2024 General Election, the government decided to take on the Nimbys in the way Margaret Thatcher had taken on the miners 40 years earlier. This did not require any new policy ideas: the ideas had been lying around for years. 

The government granted automatic planning permission to build on greenbelt land around commuter stations, as well as on golf courses. They rolled out ‘street votes’, a scheme under which whole streets can opt out of the planning system and grant themselves development rights for upwards extensions and densification, alongside an equivalent scheme for social housing estates. They revitalised the postwar ‘new towns’ programme, minus the brutalism. 

They also fundamentally changed the economic incentives around development. They localised the tax system, so that communities benefit directly from development, and so that local authorities can provide the additional infrastructure and public services made necessary by development. As a pragmatic concession, they also made sure that immigration numbers remained below projected levels. 

It was initially controversial, but it worked. Britain’s housing revolution didn’t just solve the housing crisis itself. It also had several positive economic side-effects. It increased labour mobility, it increased productivity, it cut the cost of doing business, it improved work incentives, it led to fiscal savings, and it made the economy less volatile.  

Today, in 2035, Britain is not just a much richer country than it used to be. It is also a politically less polarised country, which is more at ease with itself. 

Future historians will wonder what took us so long. 

Dr Kristian Niemietz is the Editorial Director of the Institute of Economic Affairs (IEA). His report Home Win: What if Britain Solved its Housing Crisis?, describes a hypothetical future, in which Britain has successfully solved its housing crisis.

Read more

Housing market ‘still in grip’ of Iran war slump

The price paid for first homes has surged 7.1 per cent in a year

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Opinion

Categories

  • Opinion

Related Topics

  • housing

Trending Articles

  • KPMG’s Summer Friday half-day rollback signals deeper woes for Big Four giants

  • Inflation expectations at record high in interest rates signal

  • London Tech Week sums up everything wrong with UK tech

  • KPMG report on AI found riddled with AI hallucinations

  • UK economy falters as deeper damage to growth to come

More from CityAM

  • House prices will fall by two per cent this year – the most since the financial crisis

    Property
    Rents have risen by more than a third since 2022
  • Housing market ‘still in grip’ of Iran war slump

    Property
    The price paid for first homes has surged 7.1 per cent in a year
  • House prices fall again as property market ‘deteriorates’

    Property
    The price paid for first homes has surged 7.1 per cent in a year
  • Grosvenor estate: Ministers don’t get ‘basic economics’

    Property
    Hugh Grosvenor, dressed in a tailored suit, attending a high-profile business event, engaging with industry leaders.
  • House prices slump again in London’s wealthiest areas 

    Property
    Canada has seen the average price of its property drop 36 per cent since 2018.
  • London house prices fall as Bank of England rate hikes loom over mortgage market 

    Property
    Housing delivery in London is in a major crisis
  • I’m a social landlord, but London housing needs the private sector

    Opinion
    Skyline view of Londons diverse housing architecture, highlighting urban residential buildings and iconic city landmarks.
  • Right to Buy has been a huge success, of course the left hates it

    Opinion
    Modern apartment buildings representing social housing initiatives in urban development, highlighting sustainable architec...
  • Terms & Conditions
  • Privacy Policy
  • Cookie Policy
  • News
  • Markets & Economics
  • Politics
  • Opinion
  • Life&Style
  • Personal Finance

Follow us for breaking news and latest updates

  • Facebook
  • X
  • Instagram
  • LinkedIn
Copyright 2026 CityAM Limited