Alex Morton: How to build better homes – for both younger and older people

Alex Morton is Research Director for Housing, Planning and Urban Policy at Policy Exchange.

Today, Policy Exchange publishes a new report, Housing and Intergenerational Fairness, looking at the best way to house Britain’s ageing population and contrasting it with a report out by the Fabians arguing for higher taxes on property.

Housing and other costs can place an unsustainable burden on young people. There are a host of what might be termed ‘inter-generational’ issues. The numbers of older people have risen, and will continue to rise steadily. Numbers of over 60s in the UK will nearly quadruple between 1951 and 2030. The biggest rise over the next few decades will be amongst the very oldest. From 2010 to 2030 the absolute number of those over 74 is projected to rise 73% from 7.4 million to 12.8 million. The numbers of those over 84 will more than double from 2.9 million to over 5.8 million.

People living longer is a great thing. But it has a downside. The Office for Budgetary Responsibility has produced working assumptions about the costs this will create. They estimate with 2.2% economic growth a year over the coming decades, this will require annual expenditure worth around 5% of GDP. This will largely be borne by the young. If the economy grows at a slower pace the cost as a share of national wealth will be even higher.

Alex Morton: Let’s have more self-build housing – and quick

Alex Morton is Head of Housing and Planning at Policy Exchange.

These days, politics is a gloomy business. Politicians talk of endless austerity and squeezed middles. The general public despair of the main parties. Unfortunately, this pessimism is often justified. Consider housing. The low level of housing (last year we started construction of just 100,000 homes) drives up prices and means that the average age of the first time buyer is now 38. Home ownership is sliding alarmingly, as Thatcher’s dream of a property-owning democracy crumbles. Despite wishful thinking, net migration accounts for only 75,000 homes out of a widely accepted minimum of 250,000 a year just to stand still. We need solutions.

But the debate in the last round of planning reform was bleak. One side hurled abuse about desecrating England’s green and pleasant land. The other talked of selfish and nihilistic NIMBYs.

Those arguing for more homes point out that we have ‘developed’ only 9% of England. The share of England ‘concreted over’ is just 2.4%. Even 100,000 more homes more a year on green field sites builds on an extra 0.004% of England a year. Surely this is worth doing to avert a collapse in family life as even renting family homes becomes unaffordable?

Alex Morton: Turning housing round

Alex Morton is Research Director for Housing, Planning and Urban Policy at Policy Exchange.

Terrible news. There is no other way to describe the fact that housing starts fell by 11% in 2012 to below 100,000 new homes a year. The current deplorable state of affairs is also depressingly predictable. In 2010, in Making Housing Affordable, we argued that the planning shake-up proposed by the Government, which empowered local councils, was unlikely to succeed. We noted the reaction to the proposals was negative, “with almost all councils promising ‘no new homes’ in their area – something that should be ringing very loud alarm bells in government.” In 2011’s Cities for Growth we argued that “current solutions are not clearly related to the problems that we face.”

Solutions must understand the system they face

Quoting past reports now is not to try to say “I told you so”. It is to note that solutions to a problem have to actually tackle the issues that are causing that problem. Otherwise they are either mere gimmicks or, worse, risk exacerbating the underlying causes of failure.

Alex Morton: Crisis? What Crisis? Why Andrew Lilico is wrong to say the UK has no shortage of housing

Alex Morton is Senior Research Fellow for Housing & Planning at Policy Exchange.

On Tuesday, Andrew Lilico argued there is no shortage of housing in London and the South East. His evidence was “a surplus of dwellings over households”.  He pleaded “Will everyone stop talking about a housing shortage”.

Now, Andrew is a great guy (and a former colleague).  But on this issue he is dangerously wrong.

We don’t talk enough about the housing crisis. It’s one of the biggest problems facing ordinary working people in Britain today.

It seems very odd to say we don’t have a housing problem.  After all, even after the "crash", house prices remain three times higher than they were in the 1990s, and rents have doubled.

In the Nineties, the average person setting aside 5 per cent of their income each week could save up for a deposit on a house after eight years. Today, it would take the same person 47 years.

Alex Morton: Housing - why planning powers should be reshuffled to local people and a new Secretary of State

Alex Morton is Senior Research Fellow for Housing & Planning at Policy Exchange.

Housing policy is failing. There is no other way to describe it. We built just over 100,000 homes last year and it is likely to be even lower this year. The Barker Review argued as a minimum we need to build 250,000 homes a year. Meanwhile our homes get smaller and less attractive over time – the reverse of every other good or service. We set out our analysis and predicted that housing would stall in our Cities for Growth report. Depressingly, this has come to pass.

The shortage of housing induces a great deal of wishful thinking. On the right – immigration reductions could solve it. But as a House of Lords report noted, just 7% of recent price rises are likely to be due to immigration. On the left – more effective use of stock (i.e: forcing old owners out of their homes). But this is both morally repulsive and practically impossible. Other red herrings include the 1% of homes that are long term empty; worth bringing down but hardly a long term solution.

Kick-starting house-building is easier said than done. The Treasury has fallen time and again for false solutions pushed by big developers. If Government guarantees land purchases by big developers, this supports a broken model of over-leveraged land purchase that will implode again if there is another major credit crisis (and end up with taxpayers footing the bill). If Government simply hands over the green belt to big developers it will create a backlash that will set reform back decades (and not necessarily deliver more homes as developers land bank there or elsewhere). We must alter the way land flows through the system as soon as possible to insure against future credit turmoil, moving to a model where developers are insulated from shifts in land prices.

Alex Morton: The Independent is wrong - renting isn't always a good thing

Alex Morton is Senior Research Fellow for Housing and Planning at Policy Exchange

There is agreement across the Coalition that we need a better housing market. But we don’t just need that: we need a better housing debate. Today’s series of articles in the Independent illustrate why. First, it seems to believe that home ownership only rose under Margaret Thatcher. In fact, it rose consistently over the 20th century. As a share of households, home ownershipwas 23% in 1918, 43% in 1961, 57% in 1981, and 70.4% in 2001.

Second, it ignores the fact that home ownership was rising across Europe until the recent asset price bubble. For example, it rose from 47% to 55% in France from 1980-2000 (and if you look at the figures, across all medium size countries with comparable data from 53% to 68% over the same period).