On Friday I wrote about the planning laws. I’m against them. I said the government should “poke the hornet’s nest” and get rid of most of them.
Well, I now know that’s easier said than done! I’m writing this on Saturday morning and I’ve gotten dozens of emails already. Plenty of you agree with the idea, and plenty disagree.
So this morning I want to run through a few of those emails.
Since I had the last word on Friday, I’ll start with one of the “pro-planning” crowd.
You do write some nonsense don’t you! Do you do it deliberately just to raise a response?
Take your prognosis to its logical conclusion – when London expands to cover the whole of the green belt, what happens then? No land for agriculture, no land to expand into, no more growth. Also, no home grown food, no areas for solar farms, no recreational land.
The current system on this overcrowded island may not be to your liking, but given the alternative it actually works. Your comparison with USA and Europe is ridiculous given the paucity of their population densities.
I have to disagree with Nigel on two points. The first is that expanding into the green belt would eat up the whole of England, leading to “no home grown food, no areas for solar farms, no recreational land.” As I wrote on Friday, London would only need to eat three miles into the green belt to increase the city’s size by 50%. In other words, there’s plenty of room!
The second point is that even within the green belts (and London’s not the only city to have one), English cities aren’t dense enough. That’s another consequence of planning laws. The USA might be far less dense than the UK overall, but New York City is 60% denser than London. Again, the difference is planning laws.
Next up, Peter…
You are absolutely wrong. You ignore the main point, which is that England is a heavily overpopulated country. We have too many too large aggregations of people with too little green space between them.
The most important lesson of history is that no peace lasts for ever; and since successive governments have reduced the Royal Navy to far less than would be needed to protect merchant convoys, with present population levels even without further loss of farmland there will be some very nasty starvation next time this country is involved in a serious war (which typically will come at a time and from a direction that will take both government and people by surprise).
To be fair this isn’t a point I had considered. In the event of a giant calamity like a war (or maybe even famine due to climate change), farmland would be at a premium. Score one for the planners.
I got a lot of emails like the following. I think they’re a good example of the hidden costs of planning laws. It’s easy to see the benefits of tight planning – quiet, rich towns and bucolic peace – but it’s hard to see the benefits of looser planning. My bet is that millions and millions of people are in a situation a bit like David’s, and John’s:
My wife and I live in Suffolk and would like to build a retirement property in our unused paddock, now merely a lawned area, of about 3/4 acre, in a property of over 2 acres, but planners will not allow it as it is” outside the village line.” This means we will continue living in a large family home, very suited to the needs of a growing family rather than a retired couple. No agricultural land would be taken out of use, no larger property boundary would be established, yet there could easily be one more home.
Common Sense does not exist in planners.
When will Britons realise that the only people who gain from rising house prices are the few who sensibly downsize when their children leave home or when their children’s families become too large to be accommodated? If anyone wants a higher property price as collateral for a loan it is probably a loan that they should not be taking out, especially in times like these of excessive personal debt and interest rates that can only rise.
I’ll finish with someone who reflects “the house view”:
… People view their house as an asset and therefore it has to rise every year and therefore the government gerrymander the system to ensure it rises every year.
This is the reason interest rates will stay low as well. The knock on to that is that people mortgage to hilt “knowing” the market will rise so they will have a profit making asset when they want to upsize or downsize or just move on.
This has also drawn people into the can’t lose buy-to-let market which further exacerbates the problems and causes the government to force ever growing house prices – specially in election years.
The planning laws are merely a tool to help keep house prices rising. Restricting supply is the most effective means of keeping house prices rising. Keeping interest rates low is now a necessity to avoid people losing homes they really shouldn’t have bought.
The pain to allow the market to correct is much too great for this or any government to allow. The worst hit would be the very people most likely to vote.
Philip sums it up for me. It’s a political problem which is in nobody’s interest to solve. The benefits are visible but the costs are hidden. The beneficiaries are powerful and the losers are powerless.
This all might seem like it’s miles off the beaten track for Risk and Reward. I’m not a political commentator and you’re not here for politics.
But the way I see it, every big story has an investment angle. For example four months ago in The Penny Share Letter, I recommended a tiny construction company that’s working the sweet spot in Britain’s planning laws. It’s found a way to build lots of houses. And thanks to Osborne’s many housing-related giveaways, demand is sky high.