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How Much More Housing Is Needed Outside Of London?

By Author: Bradley Weiss
Total Articles: 133

Districts outside of the capital city - including the North and West - are seeing private industry growth. But without housing for employees, that can't continue.


Where it comes to both the rising price of housing and the shortage of it, London gets all the attention. Indeed, a 2013 survey and report by the Royal Town Planning Institute found that a higher proportion of Londoners - 63 per cent- felt that there was a housing crisis in their area. This compares to 51 per cent in the South and 38 per cent in the North.


But in fact there is a growing need for more workers in metro areas outside of London. The energy sector and its employment needs provide a good example, where 86 per cent of growth in this burgeoning industry between 2008 and 2012 was outside of London. In other industries, the growth rate is more modest but still a robust 53 per cent of growth also is happening outside of London. Strategic land advisors follow these trends closely, as they represent opportunities for development and homebuilding.


Economic growth outside of London can be identified in other ways. A 2014 study conducted by Trampoline Systems on behalf of Summit: The Future of Growth, a type of business think tank, revealed that entrepreneurial hubs in the UK are remarkably outside the capital. The organisation’s report states that of 41 areas with 50 or more fast-growing firms, 23 were found outside of London. The North East and North West had 22 per cent of that growth.


Surprisingly, some of these ex-London areas grew during the financial crisis and its aftermath. Between 2009 and 2011, of the electoral wards where growth was greatest, 72 per cent were outside of London.


Growth is a good thing, wherever it happens. But if these firms are to continue building and hiring more people, while spawning supplier companies that also need to add to their employment rolls, housing must be available for those firms' workers as well.


An exhaustive report from The City Growth Commission, an independent organisation that focuses on the economics of major cities in the UK, states clearly that smart planning and adequate housing are at the core of the country's growth, in London and other major metros. In "Metro Growth: The UK's Economic Opportunity" (February 2014), the Commission makes several clear statements about the role of housing in areas where growth is to be successful:

"Planning and housing will need to be at the heart of many metros and regions' strategies. Over the last 30 to 40 years, national planning policies have often sought to constrain successful places from growing and focused instead on regenerating areas in decline. The effect of this is most acutely seen in the housing markets of London and the South East, where undersupply and strained affordability has started to impact on business decisions. London firms consistently list operating costs, transport and housing as key concerns."

There is a clear need for countries such as the UK to enhance their productivity potential and enable cities outside of national capitals to benefit from growing opportunities. For the UK, policy and strategy must shift. Rather than considering 'rebalancing' the economy between cities and regions, a successful UK economy is likely to involve a network of mutually reinforcing, complementary and connected metro regions. A national system of cities will both be supported by and provide support to London as our leading global city.

Along with a 'town centre first' policy, for example, there is a case for metros to encourage brownfield development and, where possible, increase the density of existing built up areas. But metros need to have greater flexibility to plan where they develop and how they link to other cities and regions to maximise their growth potential, while protecting their exceptional countryside and heritage.

This may be at odds with those who argue for constrained expansion of cities and who worry about blending between one town and its neighbours. But for organisations that wish to encourage sustainable economic growth - and to employ the growing British population - its clear that housing is an essential part of the equation.


Strategic land developers understand this principle well. They identify where economic growth and employment require new homes to be built, then scout for land that would effectively fill that need. From that point forward they oversee planning approvals and infrastructure development, after which the land is sold to homebuilders who complete the development process. This entrepreneurial approach to development neatly mirrors the development of local economies driven by business developers.


Investors in raw land -typically working in joint venture partnerships - are the drivers of much development. But before embarking on a real estate development scheme, residential or commercial, an investor should seek an independent financial advisor who can determine if development and raw land investing fits his or her investment strategies.

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