The London Housing Crisis: a solution

by George Hatjoullis

The problem is always framed in terms of what to do with the poor. The London housing crisis is not caused by the poor but by the rich. The latter wish to own property in London. This is a self-fulfilling and self-reinforcing desire. The rising prices encourage more rich people to join the influx. The prospect of a rich ghetto encourages the rich with more rich people leading to higher prices and more rich people and so on. In the last analysis London would be a rich enclave with all the plebs living in the midlands and commuting. Perhaps this is what the high-speed link is for?

Perhaps we should do something about the rich? Let us, for example, limit the size of property that can be occupied by a single household in London. We could define it by a maximum square footage. The rich can still come to London. They can still own property. They can let it if they wish. However, they cannot own large properties. They must convert these into units within the maximum. They can sell the units. They let them. They can leave them empty. However, each would constitute a separate address with a separate council tax  and so on.

First, there is an immediate increase in units available. Second, the rich, who typically like larger than average homes, have a major disincentive to live in London. They can of course acquire huge piles in, say, the midlands (got to justify the high-speed link somehow) which are uncapped in square footage. They can house their entourages, harems and whatever here and keep a bijou residence in London for socializing, business etc. The London crisis is solved. Simples.

Of course, the transition might be logistically disruptive. Moreover, the limit on unit size may be a delicate matter as it de facto limits family size in London. It is also unclear what the quantitative effect on units would be. Large houses in, say, Belsize Park have already by and large been converted to smaller units but the price per square foot in this area is still only for the wealthy. The idea is simply an illustration. The point is to ask why social policy always about what to do with the most vulnerable when the problems are invariably caused by the least vulnerable. London needs a diverse population. This can be achieved by limiting the number of rich as well as driving out the poor. It is a matter of how but the answer will not be found unless we pose the question.