Ben Hopkinson

Government imposed policy costs make up 57% of the clearing price of a new flat in London and 42% of a new home in the Home Counties.

Despite a big housing shortage and positive planning reforms, new home starts in England are declining from 182,000 in 2022 to under 125,000 last year.

While the macroeconomic context has worsened with build cost inflation and high interest rates, the Government is imposing more burdens on new homes, not fewer.

Taxes, levies, planning, and mandates add over £440,000 to the cost of delivering a home in London and nearly £225,000 nearby, with several of these imposed recently like the Second Staircase, Future Homes Standard, Building Safety Levy, Biodiversity Net Gain and Residential Property Developer Tax.

Individually these may be justified, but together they are making new homes unviable.

As a result, large developers are buying less land and small builders are going out of business; nearly 4,000 construction firms went bust just last year.

If we want to build more homes, we should be easing the burdens on them, not adding more.

Making housebuilding viable again is the most important issue in housing policy and my co-author, Edward Donovan, has completed excellent modelling showing how big the challenge is.

Read the full report: cps.org.uk/wp-content/upl…

And simulate what changing the policies does with Edward's modelling here: easing-the-burdens.cps.org.uk

The OBR is clear that Government policy decisions around taxation and regulation are weighing down housebuilding

What's the cause of the housing crisis: high migration or low housebuilding?

The UK has the second fewest homes per 1,000 of any Western European country and is now 6.9 million homes short of the average.

Despite building 1.1 million homes between 2020 and 2025, England's homes per 1,000 people actually decreased, which indicates a housing shortage that is getting worse due to record migration.

Had net migration stayed in the tens of thousands since 2020, house prices would be roughly £15,270 lower in England. And if net migration had been kept to 100,000 a year since 1997, about a third of that 6.9 million home shortage would disappear.

But high migration is only one side of the story. Our chronic failure to build enough homes explains the rest.

Since 1982, England has built on average only 178,000 homes a year. If England had just matched France's building rates since the 1980s, half of the housing shortage would have been eliminated. France has consistently built homes faster than its population grows, while England has stagnated since the mid-2000s.

Combining building an achievable number of homes with sustainable migration levels would have effectively closed most of the housing shortage.

You can read the full briefing here: cps.org.uk/research/the-u…

The UK is one of the most expensive countries to build infrastructure in the world. Banning diesel construction vehicles will needlessly further increase the cost of this already pricey project

Britain has an infrastructure costs problem. But what's causing this and how can we fix it?

HS2 will cost up to £102.7bn for 140 miles. Spain built the second longest high speed network in the world, 2,500 miles, for less.

It isn't just HS2 though.

Underground extensions cost twice the per-mile average of France or Italy, and six times Spain's.

Heathrow's third runway, excluding new terminals, is expected to cost 10 to 70 times more than other runways.

British trams cost more than double the European average.

Why are these projects so expensive? There are eight key reasons:

1. Planning: it took 14 years, £300m, and 360,000 pages for the Lower Thames Crossing to go from being designated a national priority to receiving permission.
2. Environmental and Habitats Regulations: these gave us the £216m bat tunnel and the fish disco, as well as an 18,000 page environmental statement to re-open just 3.3 miles of railway on an existing alignment.
3. Judicial review: of 36 legal challenges to approved major projects, only four forced a re-decision. All four were approved again, but fighting a legal challenge can add £120m+ to a project's cost and mountains of paperwork.
4. Funding: the Treasury pays, but cannot directly control a project's spend, so it instead requires long business cases. Once given funding, promoters don't have the incentive to build more cheaply.
5. Procurement: currently generalist teams rely on consultants and are more focused on social value than past performance and value for money.
6. Regulation: quangos and departments create regulation that they don't bear the costs of. E.g. new tram projects must pay for 92.5% of the cost of moving utilities, which means utility companies demand a completely new set of pipes and wires.
7. Lack of state capacity: Madrid trebled its metro at a tenth of London's cost led by nine in-house engineers. The DfT has the second highest staff turnover of any department and cannot effectively oversee a project from design through construction.
8. Centralisation: Mayors cannot fund and approve their own infrastructure. If they could, they'd have strong electoral incentives to build quickly and cheaply, as seen in France and Spain.

The good news is that every one of these is a policy choice, which can be reversed. Some fixes need only a letter from the right minister and none require significantly more spending.

My new @CPSThinkTank report lays out these fixes and how to lower infrastructure costs. If we implement them, Britain could once again build the infrastructure it desperately needs. cps.org.uk/wp-content/upl…