Is Britain's 'Housing Shortage' Real?

It’s deja vu, all over again. Planning applications for new-build homes show a fall, and the people who submit (or don’t submit) those applications - the house builders - come out with a familiar refrain: it’s all the fault of government and NIMBYs.

The House Builders’ Federation says only 25,000 consents were given in the second quarter of 2011, well under its claim that 60,000 are needed to meet ‘Britain’s needs’.

Leaving aside for a moment the accuracy of the ‘needs’ figure (and there as yet appears to be no growth in homelessness or overcrowding levels to suggest the alleged-shortfall is actually creating additional problems) is the HBF right to blame government and NIMBYs?

The HBF’s press release says: “What should have been a sensible debate into the most important planning changes since the last war, has been hijacked by sensationalist and inaccurate claims from a number of anti-growth organisations determined to fight all and any development.”

Perhaps - or perhaps not.

Research by the BBC shows that 80% of all applications by house-builders are approved - a high figure, which is perhaps testimony to the considerable effort put in by builders to woo public and councillor support before submitting plans for consent.

Yet if such a high proportion is approved, is the way to meet the apparent ‘needs’ of the country not for those same house builders to submit more plans?

Life isn’t that simple, of course, and the labour-intensiveness of planning means it would not be possible for builders to simply double the number of applications seeking consent.

But there remains a lingering belief amongst many (including estate agents and residential analysts who speak off the record to avoid antagonising fee-paying house builder clients) that developers are intentionally submitting fewer plans than they could, to keep supply down and bolster prices in what is a very difficult market, especially amongst younger buyers.

The HBF, and particularly the large house builders, have highly efficient PR machines to peddle their argument that a ‘shortage’ exists and it is the fault of others; this was seen vividly during the 13-year Labour government which swallowed most of the builders’ views.

The Cameron-Shapps-Pickles administration may be more questioning. Certainly the government’s natural constituencies and supporters - what some call the ‘Cotswold Cosa Nostra’ - are the very people the HBF and individual builders are criticising when they take swipes at groups like the Campaign to Protect Rural England and the National Trust.

Much more of that may force the government may hit back and undertake a robust analysis of the house builders’ argument on ‘housing need’. And that may come as quite a shock to the HBF...

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