This article was originally published by the New Economics Foundation.
Today marks the publication of a major new book: ‘Rethinking the Economics of Land and Housing’.
The subject is topical. The UK is facing a housing affordability crisis with enormous consequences for social justice and economic and financial sustainability.
By 2020 it is predicted only a quarter of 30-year olds will own their own home, down from half in the 1980s.
House prices have grown much faster than incomes and the economy more generally in the last four decades. In the last three years alone, the value of all housing stock in the UK has increased by £1.5 trillion to £6.79 trillion, over 3.5 times GDP. Much of the new ‘wealth’ created in the UK since the 1980s has derived from rising house prices rather than from productivity gains.
Today homes routinely earn more than people do.
How did we get here? A popular explanation is ‘we’re not building enough homes’. While this is part of the answer, it is far from the whole story.
In Rethinking the Economics of Land and Housing we reveal how many of the key challenges facing modern economies – including the housing crisis, deepening inequality, poor prospects for sustainable growth, intergenerational divides and financial instability – are intimately tied to the land economy.
Looking at the ways in which discussions of land have been routinely excluded from both housing policy and economic theory, we show that in order to tackle these increasingly pressing issues a major re-think by policymakers is required.
The book is co-authored by my NEF’s Josh Ryan-Collins and Laurie Macfarlane, and Shelter’s Toby Lloyd. It has a foreword by Professor John Muellbauer, Senior Fellow of the Institute for New Economic Thinking at Oxford University, and has already received numerous positive endorsements including from Lord Adair Turner, Dame Kate Barker, Steve Keen and Danny Dorling.
We hope to see you there.