The political economy of housing in England

Miguel Coelho, Sebastian Dellepiane-Avellaneda, Vigyan Ratnoo

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Abstract

Problems of housing affordability have been afflicting parts of the UK, especially the South East of England, for a number of years. The problem is closely related to shortages in housing supply, which are, in turn, largely associated with constraints imposed by the English land planning system. A leading theory for explaining these constraints posits that they reflect political economy forces that convey the interests of current homeowners to planning decisions in disproportionate and excessively influential ways. We test this theory by examining survey data on public attitudes to house building in local communities; and by investigating whether these attitudes are related to local planning decisions. We find that there is a tendency for owner-occupiers to express greater opposition to local house building and that, in the decade to 2011, the housing stock grew significantly less in local authorities with higher proportions of owner-occupiers among local households. The results suggest the risk that planning decisions might have been distorted in favour of current homeowners is real and economically significant. We discuss a range of historical, socio-economic and policy trends that help explain why successive governments of various stripes have been reluctant to address head-on problems in housing supply and put a curb on house prices.

Original languageEnglish
Number of pages30
JournalNew Political Economy
Early online date28 Jun 2016
DOIs
Publication statusE-pub ahead of print - 28 Jun 2016

Keywords

  • homeownership
  • housing affordability
  • housing supply
  • political economy

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