Sunday 11 December 2016

Lessons from Britain on how hard it is to get housing right

Published 06/12/2015 | 02:30

Housing is a perennially controversial subject
Housing is a perennially controversial subject
Residential property prices in Ireland and Britain

Housing is, it seems, a perennially controversial subject. Too many homes are built and then too few are built. Too many are built in the wrong places and too few are built in the right places. There are frequent laments about the decline in social housing output, but rarely, if ever, is there a discussion about what the "right" amount should be.

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Despite the importance of housing as a basic need, getting it right is hard. There are many aspects of the market - financing, building, a system to ensure standards are appropriately made and enforced, and the planning for associated infrastructure, ranging from sewers to transport connections. The State must necessarily involve itself because, as with most markets, at least some legal framework is needed to provide certainty for those operating in it.

For the unworldly who believe that we in Ireland are in some way unique in not getting housing right, one need only look across the water to be disabused of that notion. In Britain, property prices, even after having been adjusted for consumer price inflation, have been trending upwards for decades - see chart. In the south-east of England, the richest and most dynamic part of the British economy, affordability for many workers has long been a very contentious issue.

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