Why can't people simply live where they want to?
WHAT is arguably the most important thing in our lives? I’m not talking about love or money – although both are important. It’s somewhere to live. The second most important thing (again arguably) is having a job. What happens if the two don’t match up?
Let’s say you live in Yorkshire and you have your nice new shiny degree (not a rubbish one, a real one). Companies have come to your university and pitched for you to work for them. You decide that the terribly cool tech start-up would be great and you accept their offer.
The job, however, is only in London.
I think you can probably see where this is going. As if to slap you in the face, our wonderful new pro-growth government has just scrapped swathes of potential new housing in London. Which, guess what, is where the jobs are.
There are plenty of empty houses round where you live, some of which you could actually afford to buy on your lovely new salary – and you could certainly afford to rent them. Well you would if the government didn’t attack landlords at every opportunity, effectively strangling the rental market. And that isn’t where the job is anyway.
If we go back 100 - 150 years (and I DO know things have changed) as new businesses opened up across the country – not only in the UK but worldwide people moved to where the jobs were and entrepreneurs provided accommodation.
I didn’t say it was wonderful, but the amount of available housing grew in the areas that people flooded into for all sorts of reasons.
Blackpool is a great example. It was a magnet for holiday makers and hence for people to service them. The problem is as London and the South East burgeoned, the old industries in the North died out and Blackpool now has 8 out of the 10 most deprived areas in the whole of the UK within its boundaries. Lots of those people would love to get out and move away. Except they can’t because there is no longer a presumption that housing will expand to accommodate them elsewhere. So the South East and London subsidises nearly every other area of the UK.
There are literally hundreds of thousands of empty properties nationwide, mostly concentrated north of Watford. Why? Because there are no jobs there – or at least not enough of the right kind - and so no one wants to go there.
Economists Chang-Tai Hsieh and Enrico Moretti in the US have calculated that loosening restrictions on the growth of New York, San Jose and San Francisco to the “average” level of housebuilding across America would have increased US GDP by up to 9% in the 50 years to 2009. Think about that. 9%. That’s an awful lot of money.
I can’t help but think the same would apply to London, where the jobs are now, not in Sheffield or Newcastle. It’s true that some of these places are beginning to revive and re-invent themselves (Corby is a great example) but it relies massively on transfers from government to sustain it – and forever more.
Levelling up may well be a great idea but, if in fact there is no self-generated impetus, it will only ever be a sop to the locals. There are literally hundreds of transfers (to third-rate universities, to struggling local services, moving entire government departments, the benefits system and on and on). All these are doing is anchoring people in places that mean they are priced out of moving anywhere else.
Why shouldn’t they move to where they are needed? Our ancestors did a pretty good job of allowing economic imperatives to build cities where the work was. At the moment, despite promising to build 370,000 new homes in relatively short order, the bulk will be in the wrong place. Not coincidentally, the areas it is easiest to get planning have more than enough houses already – and many simply are not where people want to be. Changing – or scrapping - our totally useless planning system would be a great help.
There are all sorts of things that could be done to encourage proper housing policy – but not allowing additional housing in London isn’t one of them.
I just want to go back to where we began – love or money. I heard a lovely thing the other day when I called a very senior executive in a top tier crypto exchange. The gentleman in question started the conversation by saying he couldn’t talk for very long as it was his wife's anniversary, and they were having a party to celebrate. I asked if it was her birthday or a wedding anniversary.
“No,” he said. “It is the anniversary of the day I met her.”
I hate to say it but I kind of think that’s better than a rotten old bedsit.
PS: This is in no way a recommendation or an inducement to do anything, but he said that the crypto market had to wait for September to be finished.
