The CBI argued in its Housing Britain report published earlier this week, that housing “is not just a social priority – it is a key business issue; high cost of moving home, and lack of decent and affordable housing, are barriers to attracting and retaining employees”. It sees the failure of successive governments to address housing supply as a growth issue – one of the issues that we are studying in our work on the political economy of growth. Real house prices grew by approximately 150%, in real terms, between the mid-1990s and 2008. Home ownership has declined for a couple of decades. In 2013, more than 3.3 million adults aged 20 to 34 were living with their parents (more than a quarter of the total). The average size of new houses has been decreasing and it is now smaller than in a number of other advanced economies such as the Netherlands, Germany and the US. It is widely acknowledged that more than 200,000 new houses are needed each year over the next few decades just to accommodate new demand. Yet, the latest figure for house completions in England was approximately 114,000. The problem is intimately related to constraints in […]
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