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Self-Build Can Save Britain!

05/07/2016 12:37 | Updated 05 July 2016

(This rant contains inaccuracies, over-simplifications and sweeping generalisations)

'Self-build can save Britain... from what', I hear you say.

The current Chancellor, George Osbourne, thinks building lots of shiny new houses can save us from Stagflation, falling living standards, the cost of living crisis....you name it. In turn, I think self-build can save us from the rubbish houses that George Osbourne wants to build in order to save us from the economic and political evils of the world!

I have no issue with building a lot of new houses. As a country we have been building too few for decades, a short fall of about 100,000 a year, and the suffering that this is causing is clear. What I worry about is who will build them, how good they will be and how effective this will be in banishing the financial monsters and kick starting the economy. I may be naïve and quite possibly an economic dunce but I am not sure we really have an economic crisis. There is plenty of money sloshing around this country for everyone to get along very nicely. I believe we have a wealth distribution crisis, a crisis that this house building 'cure' is only likely to make worse.

We have already spent £4500 per household bailing out the banking system that played a large part in getting us into the mess we now need saving from. Are we are about to do a similar thing with housing, rewarding failure and concentrating more wealth on fewer people by increasing our overall debt? Currently 8 companies build 60% of new homes. They are very efficient at getting planning permissions through a rightly tough planning system. They are good at maximising profit and delivering a standardised product that, admittedly, sells. However a recent survey found that 74% of us would not buy a house built in the last 10 years, so I question how good at actually making houses are they.

We build the smallest houses in Europe, the average new houses use twice as much energy as it is designed to and our idea of 'place making' is, in most cases, appalling. These new houses sell because a chronic lack of supply has left us desperate for ANY houses. Any other industry that had this staggering lack of appeal would go bust. At the very least you'd expect the government to question its ability to reinvigorate the economy and make our lives better! But oh no, in its wisdom our government is setting itself up for a massive building programme on a 'business as usual' basis that will reward the big house builders despite their failure to deliver the quality housing that we deserve.

Putting aside quality, how much money will all this building actually get moving around the economy, and how efficiently will it trickle down to those in need? The big house builders generate approximately 15% profits on their projects, around double that of their European counterparts. This money is not used to make better homes or spent in the locations where the houses are built. It goes to the shareholders, pension funds and company owners. The big house builders use large efficient contracting firms to build. Again this money, doesn't stay local. It disappears down the motorway with the army of white Vans at the end of a days work. So much of what we are going borrow to buy these new houses will be slippery money that flows, away from local economic and needed, to the wealthy.

We face a once in a generation building boom that is likely to creates poor quality houses, debt and fails to capitalise on its potential to stimulate the economy. I believe self-build can save us form this. Self-built homes are bigger and more sustainable, no surprise because if you are building a house to live in it you will make sure its bigger, better and with smaller bills. The average person moves every 7 years, the average self-builder every 20 so it leads to more stable communities. Self-builders are inherently more inefficient than developers due a lack of economies of scale and often experience. This is no bad thing if we are trying to get an economy moving! They spend more per m2 than developers making better houses, and crucially more of the money goes to local contractors and businesses who spend it in the local economy.

Changing a piece of land from agricultural to residential increases its value by around 100 times. Should this state enabled cash bonanza that affects so many, give its financial benefit to so few? I think not. Given that the average self-builder spends more per plot than the big developers, we don't need a Marxist collectivisation of building land to make a self build revolution happen just a few tweaks to the planning process and land owners need not lose out. If more people gained from the positive financial effects of decentralised house building then resistance to new housing, NIMBY-ism by another name, would reduce. If new houses in your neighbourhood meant more money in the local economy with the wealth it creates shared more evenly, it stands to reason more people would support it.

I have no doubt that new housing will always be divisive, but the pill would be significantly sweeter if it created and sustained more local jobs and businesses. People are incredible rational, if house building spread wealth right through the economy rather than focusing it at the very top, I have little doubt more would embrace it.

For better of worse Margaret Thatcher stoked the capitalist in all of us, and created a nation of homeowners. Now the Government could make us a nation of house builders and in doing so shake up the inward looking, greedy, house building sector* and save us from another botched political scheme.

*There are some good house builders and some great new schemes but they are depressing few and far between.

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