There‘** s a reason why homes now are unaffordable, says Geoff Beacon – and a way to change that**
Income inequality is rising in the UK – but wealth inequality is worse. p
The richest one per cent of the UK population holds a share of household wealth about the same as theentire bottom 50%. A large part of this inequality is caused by** increases in house prices**.
In the 1970s York, a lower-priced home cost three to four years the earnings of low income families. Now, for this group a similar home costs aroundeight to 11 years of earnings.
Private renters on lower incomes now spend roughly half of their income on rent.
The rise in house prices has little to do with any increase in building costs. It’s mainly caused by the increase in value generated by the right to have a building on the land.
Without the right to have a building located on it, a plot of land big enough for a house may have value of up to £1,000. In York, when planning permission gives the right to have a house built there, its value climbs** above £150,000**.
This is planning gain and is oftenhalf the cost of a new house. This is planning gain and it accrues to the landowner.
In York, home ownership is now only for those on higher incomes – or who have other forms of wealth like inheritance.
Fixing the problem
York is now a remarkably affluent city compared to national averages. However, a recent report from York University’s Cost of Living Research Group says:
“thousands of local families are quietly struggling against soaring housing and energy costs, fragmented support services, and a tourist-centric city centre that leaves many low-income residents feeling isolated and priced out of civic life”.
To counnter “soaring housing costs” City of York Council needs to plan a significant amount of affordable housing.
Under new legislation, this makes compulsory purchase of land for housing much cheaper, because planning gain can be removed.
This can make houses more than £150,000 less expensive – and, if enough new homes are built, house prices and rents will fall.
In A Plan for York, I have suggested York council acquire enough land by compulsory purchase for 30,000 new dwellings. This is in addition to the allocations in the 2025 Local Plan.
Where do we put these homes? I have identified six potential sites each with room for about 5,000 new homes. They could be built on land:
- west of Poppleton Station
- east of the new Haxby Station
- north of the ring road opposite Clifton Moor
- north and east of Monks Cross
- south and east of the Designer Outlet
- south of the University of York.
As shown by house prices in York, many UK citizens want to live in or near our pleasant city. We should be generous enough let them.
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- Geoff Beacon is a climate and environmental activist. His YorkMix articles on homes and neighbourhoods will be submitted to the Local Plan 2045 Scoping consultation*