Investment, global capital and other drivers of England’s housing crisis

The popular diagnosis of the ‘housing crisis’ afflicting England, particularly in London and the South East, is of acute housing under-supply. Not enough new homes are being built, and the scarcity of housing where it is needed is driving up prices, resulting in widespread unaffordability and all the socio-economic challenges that follow. All the main political parties have committed to programmes of accelerated housebuilding, highlighting ways to sidestep the sluggish planning system and build consensus for rapid development. An opposing diagnosis of the crisis has emerged in recent years, however, claiming that available housing space in England is now double, per capita, what it was 100 years ago. England’s — and London’s — housing problems are rooted in unequal distribution, and not simply in the under-supply of new homes. Inequality in access to the housing resource results from an increased reliance on market allocation and a rising tide of domestic and international investment, concentrated in the London property market, but which causes price distortions to ripple outwards. This paper argues that, although data are scarce and contested, with regard to investment buying, the asset value attached to housing is a key market driver, which cannot be addressed solely through additional housing supply.