From View From The Top, 6 May 2026
The Seventy-Eight Year Mistake
Why I Think the UK Housing Crisis Is Different From Every Other Housing Shortage In The Developed World – It’s a theory to ponder….
I’ve been thinking. Not all housing shortages are the same.
That sounds obvious. It isn’t.
The way a shortage is created determines whether it can be fixed. How long it takes. What it costs. And whether the political will is there to fix it.
So I decided to compare two markets that get a lot of conversation. The US and UK markets.
– The United States has a housing shortage.
– The United Kingdom has a housing shortage.
But they are not fundamentally the same problem One is economic. One is political.
One has remedies that are already working in parts of the country. The other has a constituency that has been voting against the remedy for seventy-eight years.
Understanding the difference matters — not just for policy, but for anyone deploying capital into either market.
THE AMERICAN SHORTAGE — ECONOMIC AND CYCLICAL
The United States underbuilt significantly in the decade following the 2008 financial crisis.
The crash wiped out a generation of small homebuilders across the country. There was no “sweeping under the carpet” or “kicking the can down the road.” Construction and lending dried up. Full stop. Labour left the industry and didn’t fully return. Immigration policy tightened. Material costs rose. And in the major coastal cities — New York, San Francisco, Los Angeles, Seattle — restrictive zoning compounded the supply problem. The result was : a shortage of approximately 4 to 5 million homes, concentrated heavily in high-demand urban markets.
But here’s what’s important about the American shortage.
It is geographically uneven. And its’ commercially driven.
Texas has built aggressively. Florida has built aggressively. The Sun Belt has added enormous supply — Houston, Dallas, Phoenix, Charlotte — and in those markets, affordability has improved meaningfully.
Yes the US shortage is real. But it has economic remedies that are already working in parts of the country.
Where zoning is permissive and capital is available, supply responds. The market functions — imperfectly, unevenly, but it functions.
The shortage is also the product of a specific period — the post-crisis decade of underbuilding — compounded by demographic demand that outpaced the recovery. It is cyclical in origin, even if the effects have proved persistent.
That means it has a cycle-based solution. More capital. More builders. More political will in the cities where zoning is the binding constraint.
Hard. Slow. But solvable.
THE BRITISH SHORTAGE — STRUCTURAL AND MANUFACTURED
The UK shortage is a different animal entirely and this is where I think it gets interesting because for me as the structural gap has always felt slightly different.
Let’s start with a bold statistic. Britain has a deficit of 6.5 million homes — in a country of 68 million people. On a per capita basis it is the most severe housing shortage in the developed world. Britain has just 446 homes per 1,000 people. The European average is 542. France has 560. Germany has 516.
But unlike the American shortage, this one was not created by a financial crisis or a demographic surprise. It was created by an Act of Parliament.
The context matters – in 1947, Clement Attlee’s Labour government passed the Town and Country Planning Act.
In 1947 Britain was effectively bankrupt. The Second World War had consumed approximately 25% of the country’s national wealth. The economy was being sustained by a US loan negotiated by Keynes. The memory of what had happened after the First World War — when property values collapsed and contributed to the economic instability of the 1920s — was recent.
The government and the Bank of England had a shared interest in protecting asset values. Landowners had an interest in keeping values stable. A flood of new development would depress land prices. Depressed land prices threatened the collateral underpinning the banking system and wealth. A banking crisis on top of a war-depleted economy was unthinkable.
The solution was elegant in its design and devastating in its long-term consequences.
So to solve the problem, the Government nationalised the right to develop land. Requiring planning permission for every proposal. Give local councils discretion over what gets built, where, and when.
Before 1947, England had a zoning system similar to the rest of Europe — rules-based, predictable, with development rights largely attached to land ownership. After that 1947 ruling, it had something fundamentally different. A discretionary system in which the default answer to any development proposal was no — unless the local authority chose otherwise.
Housebuilding rates dropped by a third within years of the Act passing. And they have never fully recovered.
THE EMERGENCY THAT NEVER ENDED
Here is where the British story diverges most sharply from every other developed nation.
In most countries, post-war housing policy was an emergency measure that gave way to a more permissive system as the economy recovered. West Germany rebuilt its housing stock aggressively through the 1950s and 1960s. France urbanised rapidly. The Netherlands built at scale.
Britain did not.
Because by the time the economic emergency had passed, the political economy of the planning system had calcified.
Homeowners — whose wealth was protected and enhanced by supply constraint — became the dominant political constituency. Rising house prices were not a symptom of failure. For the majority who owned, they were a feature. It created more wealth.
The banking system became structurally dependent on property as the primary store of household wealth and the primary collateral base for lending. A genuine liberalisation of planning — one that allowed supply to respond to demand — would have threatened both.
Planning constraints became self-reinforcing. The more house prices rose, the more existing owners had to lose from reform.
The more they had to lose, the more they voted against it.
1991 AFTERPARTY AND THE SECOND TIGHTENING
In 1991, the system tightened further.
The introduction of the plan-led system gave local authorities even more control over the scale and location of development. Local plans became the primary instrument for determining what could be built — and most local plans were written by councils whose electorates were predominantly homeowners with an interest in limiting supply.
The gap between housing need and housing supply continued to widen. The plan-led system was designed to produce certainty. What it produced instead was constraint dressed in the language of planning.
Every subsequent government has promised reform. The Barker Review in 2004 identified the planning system as a primary cause of housing unaffordability and recommended significant liberalisation. It was not delivered.
The Coalition government’s National Planning Policy Framework in 2012 promised a presumption in favour of sustainable development. It was not delivered consistently.
For 47 consecutive governments, every subsequent review, reform, and consultation has followed the same pattern.
TWO SHORTAGES. TWO PROGNOSES.
This is why the comparison with the United States matters.
The American shortage is a problem with a solution. Economic conditions, capital availability, and political will in the right states have already demonstrated that supply can respond. Where the system is permissive, it works. The shortage is being addressed — unevenly, insufficiently in many places, but the mechanism exists.
The British shortage is a longstanding policy with a constituency.
It is not a market failure. It is not a cyclical problem. It is not the result of insufficient capital or absent developers. There is huge demand and no supply built at the right price.
It is a consequence of a system designed in 1947 to protect asset values — and sustained for seventy-eight years by the political power of the people whose assets it protects. Having said that the system is now boomeranging and what was meant to keep prices stable has led to transaction collapse and building stagnation.
And I’m not sure more capital is the solution. I personally don’t think the National Housing Bank will fix this. It is addressing a funding problem in a system that is fundamentally a permission problem.
Planning reform — genuine, structural, politically costly reform — is the only thing that fixes it. That reform has not happened in seventy-eight years.
WHAT THIS MEANS FOR CAPITAL
In think for those deploying capital into UK residential, this is not pessimism. It is clarity. Clarity at least helps navigate.
The shortage is real and structural. The demand is permanent. The political system will not solve it in any timeframe relevant to investment decisions being made today.
That means a gap persists.
Private capital doesn’t fix the planning system. It navigates it. It finds the sites that have consent. It backs the developers who know how to work within the constraints. It moves at the speed the market requires — faster than institutions, faster than government. It uses the gap as opportunity.
But nobody should confuse navigation with solution. The 6.5 million home deficit will not be closed by capital alone.
It will be closed — if it is ever closed — by a government willing to take on the political constituency that created it.
HARD LANDING
The British housing crisis is not a failure of the market.
It is a success of historic politics. A system designed in the ruins of 1947 to protect asset values has done exactly that — for nearly eight decades, through multiple governments, multiple reforms, and multiple crises.
The people it serves have never stopped voting for it. The people it harms have never had enough political power to change it.
That asymmetry is not an accident. It is the design.
Private capital navigates that gap. Only land reform closes it.
Sitting here today and having thought long and hard about where we are, this is my personal view and just a theory. But I think it has strong merit and should be talked bout more openly and honestly. It’s not a theory that a gets much attention.
