Published by Policy Exchange (London), June 2005
Winner of the Prospect Magazine Think Tank of the Year Award for the best publication by a British think tank in 2005
Download the report
It is also available on amazon.co.uk:
David Willets MP (The Times, November 30, 2005):
Exchange have made a massive contribution to the debate with the
excellent work by Alan Evans and Oliver Hartwich. There are some really
interesting ideas here."
Lord Andrew Adonis, Parliamentary Under-Secretary of State:
very model of the good think tank publication...It is hugely
challenging - and perhaps paradigm-shifting in the conclusions...it is
also extremely well and accessibly written, and excellently produced
Financial Times, September 23rd and October 7th, 2005:
"Superb" ... "Outstanding"
The Daily Telegraph, July 20, 2005
Sir Max Hastings, President of the Campaign to Protect Rural England, The Guardian, August 17, 2005
a broadside ... in support of the Prescott view that restrictive
planning law is the principal impediment to satisfying demand."
The Times, August 3, 2005
"Derides opponents of uncontrolled development in the countryside as owner-occupiers, conservationists and Nimbys"
Independent on Sunday, July 17, 2005
"A tough-minded set of answers"
Frankfurter Allgemeine Zeitung, July 25, 2005
"Evans and Hartwich explain why Great Britain has the 'oldest, pokiest and at the same time costliest' housing supply"
new report, launched by independent think tank Policy Exchange, argues
that Britain's Soviet-style planning system means that we live in some
of the smallest, oldest and costliest homes in the developed world.
by Professor Alan W. Evans and Dr Oliver Marc Hartwich for Policy
Exchange, Unaffordable Housing shows that the British culture of
centrally planned development (established by the 1947 Town and Country
Planning Act and embraced to this day by politicians of all parties)
has resulted in a shortage of affordable, desirable, high-quality
But is it what we want? And if not, why do we still support the system that provides them?
of the status quo – owner-occupiers, conservationists and NIMBYs – use
a number of arguments to support their position. These groups argue
that we live in a small, overcrowded island, that new development is
only "sustainable" if it takes place on brown field land or through the
densification of towns and cities, and that a buoyant housing market is
crucial for the economy.
Unaffordable Housing argues that these are
myths that can be debunked. The UK is less densely populated than other
European countries, but we do live in overcrowded conurbations while
devoting a massive share of our land to agriculture. As a result, our
cities are becoming less attractive as we densify existing settlements
in order to save our abundant supply of green fields.
are rising house prices the boon they appear, benefiting only a small
minority (older homeowners trading down). For others, rising prices
prevent them from buying or renting accommodation of a similar size and
quality to that which their parents could afford. This has a
macroeconomic impact too, as constraints on the supply of housing
accentuate the instability of the economy and make Britain a less
attractive place to do business.
According to a 2005 MORI poll, 95 per cent of people would prefer to
live in a house of some kind. Yet in 2004 one half of all new dwellings
built were flats.
· Only 8 per cent of land in Britain is urban,
half the figure in the Netherlands and also less than Belgium, Germany
· 78 per cent of UK land is used for agriculture, compared to an EU average of 64.2 per cent
· In the last 32 years the number of households has risen by one-third, outstripping the growth in the housing stock.
· Low rise, low density housing is better for the environment than monocultural farmland.
· Only an estimated 14 per cent of the houses we need could be built on brown field sites.
· Far from having lots of vacant buildings, our vacancy rate is very low by international standards.
From the Publisher
Commenting on the report, Nicholas Boles, Director of Policy Exchange, said:
report firmly establishes that the price of our rigid planning laws is
some of the smallest, pokiest and most expensive homes in Europe. It is
up to the voters to decide whether they are happy to pay this price,
but they deserve to know the truth."
From the Author
Oliver Marc Hartwich: "Central planning has failed wherever it was
tried. The way that housing is planned in England is no exception to
From the back cover
Soviet-style planning system means that we live in some of the
smallest, oldest and costliest homes in the developed world. But is
this the housing we want?
Housing is the first of a three-part series of pamphlets investigating
the causes of, and solutions to, Britain’s housing shortage. Alan W.
Evans and Oliver Marc Hartwich ask how Britain's housing has become the
laughing stock of Western Europe.
key finding of Unaffordable Housing is clear. The British culture of
centrally-planned development – a system established by the 1947 Town
and Country Planning Act and embraced to this day by politicians of all
parties – has resulted in a woeful shortage of affordable, desirable,
It also tackles the myths that have protected the current system of central government planning for too long. It shows that:
Britain is not overcrowded. The share of land in Britain that is urban
is lower than in the Netherlands, Belgium, Denmark and Germany. It is
true that our cities are dense and crowded, but central planning has
been the cause and it will not provide the solution.
Britain has a shortage of desirable housing. The number of households
has risen as modern family units fragment. This has caused a massive
increase in the demand for housing, which has not been met by a
corresponding increase in supply.
Cities need not damage the environment. Low-rise, low-density housing
is better for biodiversity than the blend of monocultural farmland and
high-rise, high-density urban housing favoured by planners and
guardians of the countryside.
price of Britain’s green and pleasant land (and we still have a great
deal of it) is expensive houses, small and old homes, and
densely-packed, high-rise urban housing. Whether it is too high a price
to pay is up to voters, but they deserve to know the truth.
About the Authors
W. Evans is Professor Emeritus and Director of the Centre for Spatial
and Real Estate Economics at the University of Reading Business School.
He is the author of 'The Economics of Residential Location' (1973),
'Urban Economics' (1985) and 'No Room! No Room!' (1988). He was
co-editor of 'Public Economics and the Quality of Life' (1977) and 'The
Inner City: Employment and Industry' (1980), and has published
extensively in urban and land economics. His most recent books are
'Economics, Real Estate and the Supply of Land' and 'Economics and Land
Use Planning' both published by Blackwells in 2004. He has also carried
out consultancy for the House Builders Federation, Ove Arup, Pro Svi
(Milan), Hong Kong Centre for Economic Research, and others.
Oliver Marc Hartwich is a Research Fellow at Policy Exchange carrying
out research on planning and housing policy in Britain. He was born in
1975 and studied Business Administration and Economics at Bochum
University (Germany). After graduating with a Master's Degree, he
completed a PhD in Law at the universities of Bochum and Sydney
(Australia) while working as a Researcher at the Institute of
Commercial Law of Bonn University (Germany). Having published his
award-winning thesis 'Wettbewerb, Werbung und Recht' with Herbert Utz
Verlag (Munich) in March 2004, he moved to London to support Lord
Matthew Oakeshott of Seagrove Bay during the process of the Pensions
Excerpted from Unaffordable Housing: Fables & Myths by Alan W. Evans, Oliver Marc Hartwich.
A fable: The Car and Lorry Planning Act of 1948
new Labour government which came to power in 1945 set about creating a
democratic socialist state in which the economy was properly planned
rather than left to the vagaries of the market. Many industries were
nationalised: coal, rail, gas, electricity, steel and, in 1947, a Town
and Country Planning Act was passed. Since towns were now to be
properly planned, and other means of transport were now publicly owned
and properly controlled, it was argued that the production and
distribution of motor vehicles should also be planned and controlled,
and this was achieved with the Car and Lorry Planning Act of 1948.
Act set up a system under which the production of cars was planned on
the basis of past ownership patterns and no more than this number were
allowed to be produced. No vehicles were allowed to be imported, and
anyone wishing to order a new car had to wait until a manufacturer had
obtained ‘production permission’ from the local authority on their
behalf. The application was considered by the local transport planners
and by the local transport planning committee that could refuse or
grant permission. To make the system democratic people could write in
to say why someone shouldn’t get permission. Often of course the
objection was based on the fact that the objector didn’t have a car and
didn’t see why his neighbour should have one. Such people were called
NIDDIES from the acronym NIDHI (Not If I Don’t Have It).
incomes rose and the population increased the demand for cars increased
but the number of cars permitted to be produced did not increase to the
same extent. For it was felt that allowing more cars would create
unfair competition for bus and rail.
the price of cars rose substantially. It was argued by some that this
was because of the constraint on production but the transport planners
thought that this was not so. The constraint on production did not
affect the price; the increase in price was solely caused by the
increase in demand caused by things like lower interest rates, so they
said. And anyway car prices were not their concern. They were concerned
with the real economy. It was for them to plan and for the market to
People adjusted to
the situation of course. They drove their old cars as long as possible.
Indeed it was rare for a car in Britain to be scrapped if there was any
possibility that it could be repaired. After road accidents cars were
reconstructed which would have been written off as scrap elsewhere.
Tourists visiting Britain were often overwhelmed with nostalgia when
they discovered car models they had not seen for years in their own
adjusted to the increase in the price of cars. People who had cars
discovered that far from depreciating in value the price actually
increased over time. This increased the demand further as people
without a car felt that they had to get a foot on the ownership ladder.
Banks were willing to lend money on the security of the vehicle. Of
course as car prices rose people who wanted to buy cars found that they
could not afford anything very large and so the cars built and sold in
Britain became much smaller than elsewhere. The transport planners said
that this showed that small cars were what people wanted in Britain.
The British were different from foreigners who wanted large cars. And
indeed people had so much invested in their cars that they resisted any
relaxation in the control of production because this would result in
their cars losing value.
justification for this came to be that the limitation of car production
was in the interests of global sustainability, to reduce pollution and
fuel usage. Some economists said that the stock of old cars in Britain
polluted far more and were far less fuel efficient than the newer cars
used elsewhere. But these critics were ignored, because after all, they
were merely economists and what did they know...