Building enough homes has kept prices down in Leeds — the data is strong.
On Newsnight and in CityMetric I’ve heard that “building more houses isn’t enough to bring prices down”.
If that sentence ended “in London” then I’d keep quiet. I don’t know London. But the sentence doesn’t end that way and I do know a lot about Leeds. I think that the data tells the opposite story. Where we’ve let the market build enough homes, we’ve kept prices down.
The logic goes like this,
- Leeds is a democracy and thus allows homes to be built where there is least opposition. There is huge opposition to homes in outer wards and little opposition to homes in inner wards.
- Home-builders build flats in inner wards and houses in outer wards. In effect Leeds has let the market build flats while restricting the number of houses.
- House prices in Leeds have risen while flat prices have not. Building enough flats has kept prices down. Logically, building enough homes would do the same.
I’m pretty sure that the data supports this.
Leeds opposes building in outer wards much more than in central wards.
Almost every response to the Leeds Site Allocation consultation was an objection to building more homes. Since each objection is contained in a standard form the size of the pdfs is proportional to the strength of objection. People in outer wards object to housing a huge amount more than those in inner wards. By a factor of 65.0MB to 1.2MB.
Builders build flats in inner wards and homes in outer wards.
Leeds has been building lots of central flats since about 2004. I have data on that but it’s messy. Much easier is to show where homes are currently planned in the city (based on this open data set) and the data is striking.
Around half of Leeds’ currently planned or allocated homes will be built in the six inner wards.
In inner wards over 90% of the homes that will be built are flats. In outer wards the majority (of a very small number) are houses.
This pattern of home-building has been present since around 2004.
House prices have risen. Flat prices have not.
In Leeds the price of a semi-detached house has risen nearly in line with the national average since 1995.
But flat prices have been stable, and fallen in real terms, since 2004 when we started building flats in the city-centre.
And it’s not just Leeds!
And Leeds isn’t unique. Almost every Northern English large city shows the same pattern. Where we let the market build enough homes their prices do not rise.
Yes, I’d like to have better data too and more time to analyse it.
I don’t think this data will change many people’s minds. They’ll want to see more and better data (I’m getting it) but even if I had that I don’t think it would change anyone’s mind.
Housing is a largely fact-free zone in UK policy debates. In Leeds alone I hear myth after myth; “foreign buyers are buying everything” (they aren’t), “there are loads of empty flats” (there aren’t), “we don’t need more homes” (we do), “developers are land-banking” (they aren’t doing so excessively) — the list goes on, and on, and on.
I would like to do a more detailed study of the link between house prices and supply in Leeds. I already have most of the data. I reckon it’ll take me about a week. If you’re interested in funding that please get in touch.