With London house prices set to rise by 35 per cent in five years, how can we solve the crisis?

BUILD ON THE GREENBELT

High housing costs in London and the south east are a direct result of Britain’s draconian planning controls. The supply of new homes has been prevented from keeping up with demand, with dire social and economic consequences. Restrictions like the green belt force large numbers to live in unsuitable, low-quality, and often overcrowded accommodation. Others are pushed into long-distance commutes, leapfrogging the green belt to live in towns that may be 40 or 50 miles from central London. Expensive housing also prevents people from the rest of the UK moving south to get better jobs. To increase the supply of new homes and cut housing costs, London must be allowed to grow. Brownfield sites are expensive to develop, are often in undesirable locations, and cannot provide enough suitable dwellings to meet demand. Allowing the development of green belt land, while politically challenging, would be a highly effective way of addressing the current crisis. Richard Wellings is deputy editorial director at the Institute of Economic Affairs.

NEW COMMUTER TOWNS

Here is a staggering statistic. Homes in London’s 10 richest boroughs are worth more than all the housing stock in Northern Ireland, Scotland and Wales put together. But although London is booming, its housing market is increasingly divided between the haves and the have-nots. The mayor wants to build 40,000 homes a year, but only 17,000 were completed in London in 2012, despite the important fact that the capital’s population is set to hit 10m by 2030. A city that cannot provide decent affordable homes for all its people is heading for trouble. We are simply not building enough homes. One solution is to build a new generation of high-quality, self-sufficient new towns beyond the green belt in order to ease the pressure on London’s over-inflated market. We did it in the post-war years, when 32 new towns were built. They are now home to over 2m people. We can do it again if the political will is there. Colin Wiles is a housing consultant and commentator.