home & this decade · 3 min
Will you ever own a home?
A shortage of houses, or a flood of cheap money — and does the next five years hold any relief?
Britain really did under-build for seventy years. That still isn't the whole story — and 'just build more' won't fix it on its own this decade.
Our observer notices something odd about this island: it treats the same object — a place to live — as both a human necessity and the nation's favourite investment. Hold those two ideas at once and the argument starts to make sense.
Here's the shape of it: who blames what, who has the better half of the truth, and why 'just build more' is right and not enough at the same time.
What you're usually told
Just build more
Most economists and the YIMBY centre
It's a supply shortage, full stop. Britain has a backlog of roughly 4.3 million homes it never built compared with the average European country, and a planning system largely unchanged since 1947 keeps the spades in the shed. The average English home now costs around 7.6 times typical earnings — far more in London and the South East. Fix planning, build the homes, prices ease.
It got financialised
The housing-justice left
Homes stopped being places to live and became assets to own. Right to Buy sold off the social housing and little replaced it; landlords and investors now compete with first-time buyers; wages stagnated while prices did not. On this view, building alone won't fix who ends up owning the homes.
It's cheap money and demand
Market economists and much of the right
A decade of near-zero interest rates poured cheap mortgage credit into a fixed stock of property, and prices duly exploded — faster than any builder could match. Add population growth and demand simply outran supply. The 2022 rate rises then stacked unaffordable mortgages on top of high prices.
The contrarian read
The 'it's not mainly supply' read
Josh Ryan-Collins (UCL) and the land-and-credit school
A leading housing economist argues the dominant culprit is the feedback loop between elastic bank credit and inelastic land: banks create new money to lend against existing property, prices rise, that justifies more lending, and round it goes. His evidence is hard to wave away — the IMF finds a 10% rise in household credit lifts house prices about 6%, and the OECD blames financial deregulation for roughly a 30% rise in real prices. Build all you like; if credit keeps flooding in, prices stay high.
Our read
Most likely: it's a supply problem and a finance problem — so expect modest relief, not a fix, over the next five years.
Our confidence: moderate (≈60%). A judgement from the evidence, not a forecast.
The two stories run on different clocks. Over the long run the supply camp is plainly right: seventy years of under-building left Britain genuinely short of homes. But the timing and violence of the price boom tracks credit and interest rates more closely than bricks — which is why prices can dip when mortgages get dearer without a single extra house being built.
So the honest version refuses both slogans. The average English home now costs around 7.6 times median earnings — over ten times in London — and the government's 1.5-million-homes target is running at under a quarter delivered. Build far more and you slow the rot; but unless credit and tax settings change too, new supply gets capitalised into land values and affordability barely moves.
- ≈55%Both levers or bust — planning reform adds homes slowly, rates ease toward ~4%, affordability improves only at the margin.
- ≈25%Supply breaks through — sustained 300k+ homes a year drags the price-to-earnings ratio down over 10–15 years.
- ≈20%Finance dominates — rates, credit and investor demand keep prices high whatever the builders do.
How sure are we?
The average English home is ~7.6× median earnings (10.6× in London) — near record. Forecasts here are genuinely uncertain; treat the rate path and the building numbers as live, not settled.
Where this comes from
- Centre for Cities (2023) — The Housebuilding Crisis: the UK's 4 million missing homes The 4.3-million-home backlog and the planning-reform 'build more' case.
- ONS (2026) — Housing affordability in England and Wales: 2025 The 7.6× England ratio (10.6× in London), released March 2026.
- Josh Ryan-Collins (2018), UCL IIPP — Why can't you afford a home? The land-and-credit feedback cycle — the 'not mainly supply' read.
Go deeper — read the book
The short, sharp case the build-more consensus skips: how cheap credit and finite land trap a generation out of ownership.
The sharpest short answer in print — credit and land, not just planning. An afternoon's read that reframes the whole debate.
Written with AI and editorially curated. Talescout always labels AI text (EU AI Act, Art. 50). Numbers are considered judgements, not measurements.