Question ade Social Sciences

Main Causes of the Current Housing Crisis in London

Discuss the main causes of the current housing crisis in London and the UK

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Answer Expert #10136

Housing tenure in the UK can be divided into owner-occupier, private renting and social housing (Pacione 2005). It is argued that over the past century successive government policies have altered tenure from predominantly renting in the 1950s to an expectation of owner-occupier by the 1970s. The aim of these policies was to reduce public spending on housing and to limit the power of local authorities (Malpass 2009). The result is that there is severe undersupply of social housing in the UK which puts pressure on the affordable housing market (Pattison et al. 2010).

It is argued that house prices affect the supply of housing, particularly as the economy influences the availability of credit and interest rates, employment and household income. Furthermore, the gap between supply and demand creates a vicious circle with respect to house prices and availability since an undersupply coupled with high demand due to population growth and migration, such as that experienced in London, increases house prices, forcing would-be buyers in to the rental market which then increase rental values (Ferrari and Rae 2010; Baddeley 2005).

The planning system affects housing, where planning policy is at central government level and implemented by regional and local planners. These policies do not always reflect the needs of the community or the release of land for development, resulting in a lack of supply of housing and in some cases objections to proposals for housing development due to the “not in my backyard” syndrome (Ball 2013; Tallon 2013). The introduction of the Localism Act 2012 aimed to devolve planning powers to local planners and the community however it is still too early to assess if these changes have had a positive impact on housing supply (Ricketts and Field 2012; Hodkinson and Robbins (2013).


Baddeley, M., 2005. Housing bubbles, herds and frenzies: evidence from British housing markets, University of Cambridge, Dept, of Land Economy, Centre for Economic and Public Policy Brief, No. 02/05, pp.1-32.

Ball, M., 2013. Housing policy and economic power: the political economy of owner occupation. Routledge.

Ferrari, E. and Rae, A., 2011. Local Housing Market Volatility. York: Joseph Rowntree Publications.

Hodkinson, S. and Robbins, G., 2013. The return of class war conservatism? Housing under the UK Coalition Government. Critical Social Policy, 33(1), pp.57-77.

Malpass, P. (2009) Housing, Markets and Policy. Oxford: Taylor and Francis.

Pacione, M. (2005) Urban geography: a global perspective. Abingdon, Oxon: Routledge.

Pattison, B., Diacon, D. and Vine, J., (2010. Tenure Trends in the UK Housing Sector will the private rented sector continue to grow. London: Building and Social Housing Foundation.

Ricketts, S. and Field, D., 2012. Localism and Planning. London; Bloomsbury Press.

Tallon, A., 2013. Urban Regeneration in the UK. Abingdon: Routledge.

Whitehead, C. and Williams, P., 2011. Causes and consequences? Exploring the shape and direction of the housing system in the UK post the financial crisis. Housing Studies, 26(7-8), pp.1157-1169.