Britain lacks millions of homes due to tight planning laws: think tank

BRITAIN would have an extra 4.3 million homes if its strict planning laws were more like those elsewhere in Europe, a study said on Wednesday (Feb 22).

The Centre for Cities, a think tank, blamed the UK’s “outdated” planning system for sluggish housebuilding rates going back decades.

Existing regulation, established under the Town and Country Planning Act 1947, allows local authorities to reject developers’ applications even if they adhere to rules.

Housebuilding rates in England and Wales fell 40 per cent following the laws, said the research group, from annual growth of 2 per cent between 1856 and 1939, to just 1.2 per cent between 1947 and 2019.

The findings highlight a shortage of housing in the UK, which comes alongside inflated property prices and soaring rents in cities such as London.

“UK planning policy has held back the economy for nearly three-quarters of a century, stifling growth and exacerbating a housing crisis that has blighted the country,” said Andrew Carter, the Centre for Cities’ chief executive officer.

Housing supply fell behind other European countries in the decades following the Town and Country Planning Act, the report said.

Between 1955 and 1979, the UK dedicated an average of 3.3 per cent of gross domestic product (GDP) per year to building new homes, compared with 5.1 per cent in the Netherlands, 6.2 per cent in Finland and also considerably lower than in France and West Germany.

In order to close the backlog with the Continent, the research group estimates England needs to build 442,000 new homes annually over the next 25 years – double the current rate.

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The UK government recently watered down a target of 300,000 new homes per year.

“Big problems require big solutions and if the government is to clear its backlog of unbuilt homes, it must first deliver planning reform,” added Carter.

“Failure to do this will only continue to limit England’s housebuilding potential and prevent millions from getting on the property ladder.” BLOOMBERG