The Lyons Review

“The 180-page review, probably the most extensive single piece of policy produced by Labour in opposition, sets out a plan for building 200,000 new homes by 2020.” (The Guardian)

They want to double the amount of custom/self build
Headline figure: They want to double the amount of custom/self build

Politics aside, the Lyons Review is a real whopper and took around a year to produce. I’m obviously not going to dissect the entire thing, but let’s see what lies within…

The main issues summarized in the foreword are:

1. Where are new houses going to be built? Land suitable for building, in places people want to live is scarce. The planning system has it’s own problems and existing populations have a tendency to resist new developments by default, regardless of overall suitability.

2.Who is going to build them? Volume house builders will, unsurprisingly, continue to do most of their work with the profit motive in mind and only at the rate they can sell (not rent) existing stock. Housing associations, smaller companies and self builders could all play a larger role.

(3.) Underlying all of this, is that the bottleneck is having increasingly grave economic impacts: a growing housing benefit bill, the ‘thwarted ambitions’ of younger generations, inequality and of course all the employment and activity that house building could bring. (of course you may completely disagree with the idea of perpetual economic growth to begin with… that’s a debate for another day)

Here are some of the facts that really clobber you over the head with how substantial the problem is:

– In 1997 it took an average family just three years to save for a proper deposit on a home but today it takes 22 years.

– The average home now costs 8 times the average wage.

– In the 1980s there were around 10,000 small house builders active (each completing less than 500 homes a year) and they accounted for nearly 60% of the market. Now there are only 2,800 completing 27% of the market.

– There’s a great chart (below) showing the proportion of party manifestos over time that have addressed housing issues, pretty much stopped being a key policy area in the 1980s. (although it only covers the big two parties)


– According to polls, 80% of people believe there is a housing crisis (Ipsos Mori) and 63% want housing prices to stablilize (Guardian/ICM).

– House prices rose 4 times faster than earnings in 1994. Woah, that’s pretty crazy right? Well, by 2014, house prices were rising 8 times faster than earnings.

– The average renter in the private sector uses 40% of their income for rent whereas the average owner-occupier uses 20% of their income for a mortgage.

– 10% of the land area in the UK is developed. Just over half (so 5%) is for housing and interestingly only 1% is for actual dwellings with the remaining 4% is for the gardens attached to them!

– The value of land naturally increases when it has planning permission. Currently, the average hectare (10,000sqm / 2 acres-ish) of agricultural land is worth £20,000. The same hectare with planning permission rockets to a value of £1.2m in the Midlands, and £4m in outer London.

– Theoretically there is enough suitable brownfield land out there to meet the proposed 200,000 per year target for 5 years, without having to do any greenfield building at all.

How has it been recieved?

The housing charity Shelter covered the production of the report earlier, and has been broadly supportive of many of the suggestions (link)

Legal commentary via Lexology described much of it as ‘apolitical’ suggesting whoever gets into power next would be wise to follow many of the recommendations, particularly as regards undersupported local planning departments and the regionalisation agenda in general. (link)

A former Green Party member who has since formed the House Party (no, not that kind of House Party) raises a number of problems with the piece. He points out the composition of the steering group (eg, not many actual people directly involved in housebuilding!) and that many of the proposals would not have much of an affect on house prices or even require that much backing from the Treasury. Immediate action could be taken on better support for existing (and likely future swathes) of renters as well as presumably redefining the way local authorities are allowed to borrow for social housing (a bit more like some countries in Europe). (link)

I’m sure there’s more in there and I won’t claim to have read it all, but certainly Housing is getting pushed up the agenda, even if there may be few ‘big names’ in politics who actually have the passion to pick it up and run with it.

See you next time!

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