1. Demographia, 5th Annual Demographia International Housing Affordability Survey: 2009 Ratings for Metropolitan Markets, 26 January 2009
2. Bank of England Inflation Calculator
3. Sir John Boyd Orr, Food Health and Income, London, Macmillan, 1936, published for the Market Supply Committee of the Ministry of Agriculture
3. Charles Loch Mowat, Britain Between the Wars, 1918-40, London, Routledge, 1968
4. Ian Abley, 'Development Rights for the Hydrogen-Fuelled Future', chapter 18 in Ian Abley and James Heartfield, editors, Sustaining Architecture in the Anti-machine Age, Chichester, Wiley Academy, 2001, p 210 to 227
5. James Heartfield, Let's Build! - Why we need five million new homes in the next 10 years, London, audacity, 2006
6. Dennis Hardy and Colin Ward, Arcadia for All: The Legacy of a Makeshift Landscape, Nottingham, Five Leaves, 2004, p 302, first published 1984
Plotlands as a measure of affordability 75 years on
Even in 2009, after the housing bubble burst at the end of 2007, British housing remains unaffordable by measures used to define affordability by the United Nations and the World Bank. Using those internationally established measures Demographia has consistently recommended that the "median-priced house" to buy on the market should cost less than 3 times the "median gross household income" for a market to be called "affordable". (1) With British household income averaging at around £30,000 this suggest that a volume of privately owned housing priced in the middle of the market should be costing no more than £90,000.
Then Britain would have an affordable housing market. Britain doesn't.
In 1934, three quarters of a century ago, it was possible for the British workforce to become owners of housing costing about 3 times their household income. Mr and Mrs Mills built a bungalow they called The Haven in the Dunton Hills "plotlands", west of what became the post-war new town of Basildon in Essex. Mr Mills was a carpenter, and he and his wife were aged in their early twenties. They had youth, but more importantly were prepared to make something of their lives.
Essex farmland was often of poor quality, and could not compete on food production, either in Britain, or with imports from abroad. From the end of the nineteenth century unproductive fields were sold to land agents, who then auctioned them off in small plots. By the 1920s and 1930s these auctions were well organised and entertaining. They attracted aspiring Londoners after the First World War, who travelled by train to the "champagne sales" across Essex, and the wider South East. Coastal destinations were popular with working families cramped in poor quality rented accommodation. Many plot buyers were initially interested in a weekend retreat with more living space, since they had to return to work, but this provided regular passengers for the railway companies.
For the Mills household Dunton offered the chance at a permanent home of their own, free of private or public landlord. The Dunton plots were 6m (20ft) wide strips of between 48 and 54m (160 and 180ft) in length. The plots would have been sufficient for terraced houses at a density of 30 homes a hectare allowing for the width of the avenue in front, and cost about £7 each. The Mills were ambitious, and did not want a terrace with all the added complexity and cost of party walls. They bought three gently sloping plots totalling 972 m2. With the avenue that is a detached house density of about 10 homes a hectare. It meant a garden space for Mr Mills to build a workshop, keep a horse and cart, and store bicycles. If business thrived he could park a motor vehicle.
The Mills paid £20 for that freehold land in 1934, which is the equivalent of £1,073 today. That would have been about £200 a hectare, and a good sale over the value of agricultural land for the land agent. They took out a mortgage of £45 for materials at the same time, which is £2,414 today. (2) That £65 has to be compared with their income. In 1936 Sir John Boyd Orr published Food Health and Income. (3) He divided the British population into groups of income, with 20 shillings in a pound, and with weekly incomes ranging from 10 to 45 shillings for 80% of people in the mid-1930s:
In the inter-war Depression after 1929 a carpenter may have been in Group 2, which meant the £65 was between two and three years of income. By 1934 Britain was emerging from the worst of the economic crisis but mass-unemployment persisted. There was a Royal Commission on Unemployment between 1930 and 1932. Following the Unemployment Act of 1934 the Unemployment Assistance Board was set up, and the household means test was introduced until 1941. (3) However there was a lot of house building activity in the South East and Mr and Mrs Mills clearly valued their independence. If Mr Mills did well they may have been in Group 3, and the cost of starting their home was twice their annual income. Mrs Mills may have earned a second income, or grown some food in the garden to make up for a lack of income. But theirs was a better prospect than the Demographia figure of a "median multiple" of 3 for affordability. The Mills set about building their home for a total of £65 then, which is £3,487 now, excluding the labour that was required, and without any mains utilities. That was far from comfortable.
Many plotlanders lived in tents while they were building their homes, but the Mills built the workshop first and lived in that. The avenue was a muddy track, water had to be carried from stand pipes down the avenue, and the toilet was at the bottom of the garden. Initially they built two rooms with a central hall, anticipating the kitchen extension onto the garden. As the Mills had their children they added a bedroom. The initial home was very small at about 35m2. With the back bedroom for their two boys, and kitchen, it was increased to about 50m2. The Haven housed a family of four. Subsequent families living there had three children. The bungalow may have been smaller than council housing, but Mr Mills was able to trade from his workshop. It was certainly not as mean as living in private rented accommodation in London. Also they had a chance of paying off the debt to live more cheaply.
Today poor quality agricultural land costs between £10,000 and £15,000 a hectare. Even allowing for a land agent that may mean £50,000 to £100,000 for a hectare, to be sold in plots of between 10 and 20 homes a hectare. That is plots of between 900 and 450m2 allowing for a road and foot path. There are as many, if not more farmers today who would sell their land for housing development at £5,000 a plot.
Add to the plot a £5,000 cost for utilities and £5,000 for various technical and organisational fees, ensuring compliance with current Building Regulations, the contemporary plotlander would need £15,000 to start. If the home was to be 75m2, and built at £800/m2, the construction would cost £60,000. Add a further £5,000 for fitting the house internally, the whole would cost £80,000. That is a suburban home with large garden for less than three times British average household income. How the home is built hardly matters for the purpose of this argument about aspiration and affordability, (4) because it would be better built today than at any time in British history. The Haven was makeshift. Professional builders can make a profit in brick and block construction at £800/m2.
Repeat that 500,000 times, requiring between 25,000 and 50,000 hectares of redundant farmland in Britain. Housing production then matches annual growth in household numbers, and replaces the worst of the ageing British housing stock at a rate of 1% per annum. (5)
Do that every year and the construction industry would transform. If people wanted to avoid using a professional builder, and work like the Mills family to build their own home, they could. Most would not want to, or be able to. They would simply want plenty of living space for as little debt as possible, to pay off as fast as possible. There is no need to make a virtue out of makeshift as Dennis Hardy and Colin Ward tended to do in Arcadia for All, the best study of the British plotlands:
'It is arguable that a society whose industrial base is slipping away, which cannot provide employment for its population, and where house-building, public or private, has reached its lowest ebb for decades, might well seek to encourage rather than deter those who choose to turn their own labour into capital, in housing themselves.' (6)
A home is not really "capital" in the sense of being capable of productive investment. A home is an asset, but it wears out as it is lived in. The difficulty is always finding sufficient finance for a home to be built initially, to be repaid from income. The lack of access to finance means having to make do with the discomfort of living in a tent, or a shed, while trying to save enough to build out of income. For most people in Britain in 1934 as today, incomes are low and savings difficult secure.
However the plotlands show that if land were available today at £5,000 it would be possible to build affordable housing. The problem is that land at these prices does not exist anywhere on the market with benefit of planning approval. Farmers would sell, but no-one buys if they want to build a legal home. Few would risk tens of thousands of pounds on struggling to build a home that planners would work hard to have demolished. Conventional finance would be unavailable to plotlanders in 2009. Yet unless land can be bought at £5,000 a plot today there is going to be no affordable new housing for anyone in Britain.
There is plenty of redundant farmland in Britain in 2009, but no-one is allowed to build on it because of the Town and Country Planning Act that stopped the plotlands in 1947. What Mr and Mrs Mills did for themselves on their own land 75 years ago is today illegal. The law is wrong.
The planning law in 2009 ensures that no-one can build a home in Britain for less than three times an average household income. Planning ensures the housing market stays inflated, even after housing bubbles burst.
If Britain wanted a housing market as Demographia considers affordable we could get rid of the planning law and look to plotlands. However the housing market would deflate to the point where the mortgage market collapsed, seriously affecting the financialised British economy. All we do in Britain is moan about planning and the price of housing, but we don't seriously want to do without planners, or house price inflation.
Ian Abley 05.04.09
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