A Manifesto for Lord Mandelson- 6 (Housing)
Housing
Underlying position
If you find it weird that a series on US trade touches on housing, please soldier on for a few paragraphs. To kick off, everyone agrees that Britain needs more houses. Then again, not everyone gets how much we are confounded by a toxic brew of restrictive planning rules; obsolete building (and fire) codes; Dickensian trade skills; housebuilders whose core business is so problematic that they must hoard land or lose out; and generations of architects stymied from pleasing the public, instead embracing fads: yesterday brutalism, today vernacular revival.
At long last, the authorities recognise that we must revisit planning. This follows our prolonged campaigns, including “Cooped up”, “Rooms for debate”, “Homes for all” and “Build, baby, build”, this last theme endorsed by Starmer himself. We are delighted with these preliminaries, would welcome more, and now park the topic of land-use for the balance of this note.
What follows goes to supply-side problems, starting with some analogies. When Marriott Hotels went to Warsaw, they rejected anyone previously in Polish hospitality. The American bar chain, TGIF, acted similarly when first arriving in Britain. When Heathrow Express launched their service, they excluded anyone formerly on British railways. Or take British mass-production of cars: a poisoned legacy prevents operation with all three of domestic capital, labour and management.
In short, industrial cultures can become irreparable. British construction reached that point in the seventies: thereafter, it became impossible to succeed with the Full Monty of local architects, contractors, developers and planners. Those with ambition learned to
do without all four, as Canary Wharf, where the local authority was replaced with a development body, who then worked with Canadian developers, American architects and international contractors; or
work with international developers, as the Australian proprietors of Westgate shopping centres; or
dispense with local architects, as almost all new developments in the City of London; or
bring in overseas contractors, as Hochtief at the Bishops Bridge Road Bridge.
None of this is housing, which remains hamstrung by its complex dysfunction, leading to a modern housing-stock unloved by its occupiers and despised by tastemakers; to new-builds now the smallest in the OECD, on estates ever more densely packed; and to social housing and poorly designed and run-down new towns. Starmer’s “next generation of new towns” recognises some of the symptoms of our failure, eg, dismal design and sclerotic process. Unfortunately, his plans are almost bound to disappoint as neglecting the deep-seated supply-side deficiencies.
Dealings with the US
So to cut the Gordian knot. If Lord Mandelson visits the top three American housebuilders, he will find that they are so little cowed by regulators that they offer attractive master-planned communities, extensive customisation, affordable prices and the latest home technology, based on
cheaper land, largely reflecting the lack of regulatory pressure on prices (as noted above, you can find our land-use recommendations elsewhere);
cheaper construction costs, largely due to techniques whereby factory-build dispenses with erratic “wet trades”; and
building codes which support these techniques.
Lord Mandelson should invite US trade negotiators to work with us with a view to reforming our regulatory regime and opening the door to American technology and supply chains. In 2024, the completions of the US top three housebuilders were six times those of the UK top three, so the Americans are big enough to make a difference. Nonetheless, Lord Mandelson will need all his fabled skills, as such departures will provoke fierce blowback from local incumbents. There are, however, few greater services he could do his country.
Equivalent to Europe
Before Brexit, the largest European general contractors entered British markets. None has introduced technological innovation in housebuilding. Instead, they went with the flow, compromising themselves accordingly and ruling them out as part of the solution. Specialised German and Scandinavian housebuilders have system-build skills, but they are too small to invest on the scale needed. So, nothing doing here.
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