“Building more homes in London won’t solve the country’s housing crisis”

Owl says: most homes in the Devon and Somerset Local Enterprise Partnership area are being built near Hinkley C nuclear power station to house up to 5,000 largely temporary workers.

“… England’s fragile economic growth is underpinned by household expenditure, which accounts for 63% of gross domestic product. This is dependent upon perceived wealth, which is directly correlated with the price of housing. House price growth has left homeowners (particularly in London) feeling richer while renters feel poorer. To undermine that perception of affluence among homeowners would have a significant economic impact.

So there is huge demand for new housing, but little incentive for policymakers to deliver this where greatest demand exists. We need an answer that is politically expedient, economically pragmatic and socially responsible.

The government needs to avoid house price depreciation but stabilise prices in London, where there is highest demand. Affordability is a spatial problem that demands a spatial solution. It must focus attention on areas where the ability to purchase and the cost of doing so are more closely aligned. The mayor’s plan for London could then focus policies on providing genuinely affordable homes for Londoners.

The Midlands engine and northern powerhouse are attracting and retaining investor attention, and elected mayors in Bristol, Birmingham and Manchester, among others, are beginning to flex their muscles. Yet this is as much a reaction to the London market as any proactive national policies. Clearer government leadership would expedite change and provide greater long-term certainty.

Investment and infrastructure decisions are being made but are too often buried within various national plans ‘and strategies. They should be bought to the forefront. Every other country in western Europe has a national spatial plan; England should publish one too. This would make clear how spending and policy decisions are related, supporting regional revival.

The housing paradox is stifling. To solve it, we must take a pragmatic approach that supports England’s regions. That would not be at the expense of London, but we could all be better served by casting a wider net.”