Monday 24 November 2014

The Non-Met Commission

[Posted by Prof Henry G. Overman]

I've spent a lot of time over the last seven years (since SERC was founded) thinking about how urban economics can help improve urban policy. As part of that, I've helped specific cities and LEPs develop their evidence base and think about policy implementation (particularly Manchester, but also North East LEP, Birmingham, Great Cambridge / Greater Peterborough). I've also provided advice to BIS and Cabinet Office on the implementation of City Deals.

Recently, however, I've had an opportunity to move beyond this urban focus to think about the challenges facing the 'non-mets': the places outside our metropolitan areas that produce roughly half of England's GDP. The challenges these places face, and some of the potential solutions, are discussed in the interim report of the Independent Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England (I'm one of the commissioners).

We're working on refining our recommendations over the next couple of months. As the report makes clear - there are some big questions still to answer - not least about how we might reform the relationship between central and (non-metropolitan) local government. I know that many people would like to see wholesale reform in this area. But there's also the possibility of an 'earned autonomy' model for non-mets that would parallel the process that has seen Manchester the first of the mets to be handed stronger powers (with Leeds, Sheffield and perhaps others to follow). I imagine many heated debates to come as we try to resolve this and a range of other crucial questions. Do get in touch with the commission [] if you'd like to know how you can contribute to those discussions.

Tuesday 11 November 2014

Building homes where we need them

Finally had a chance to catch-up with Centre for Cities report on where to build homes for Britain's most successful cities.

In the ten least affordable (British) cities building out every brownfield site delivers a total of 425,000 extra houses. If you go outside of their existing built-up area and use land within 25 minute walk of an existing train station you could add up to 1.4 million new homes (at reasonable densities). If neighbouring authorities could be made to cooperate that total rises to 3.4 million homes within 2 km of existing train stations.

The trouble, of course, is that those 3.4 million homes (within walking distance of existing infrastructure) would need to be built on green-belt land. In total, around 12.5% of the green belt land around those cities would be needed for development.

Achieving agreement on this scale of development on green belt land will clearly be difficult. Although, as the report notes, developing brownfield land can be a complex process and may require cities to take additional actions (e.g. land assembly) and investment (e.g. new infrastructure). And that brownfield land is only capable of delivering a fraction of the homes that could be built around existing infrastructure in the greenbelt.

In short, as the report makes clear, both options have their challenges, but making housing more affordable in our most successful cities will require a more sensible debate to designate land on its merits rather than according to whether it is currently designated as brown or green field.

Monday 10 November 2014

Who buys new homes in London?

There's some interesting figures in this British Property Federation report from earlier this year on purchases of new homes in London (which I somehow missed first time round).

Headline figure is that various forms of investor acquire around 60% of new units with owner occupiers taking 40%. Around half of those investor purchases are by overseas buyers (defined as buyers who are normally registered as overseas). There's little evidence that those overseas buyers are leaving properties empty.

There are interesting variations across price ranges and locations - with owner occupiers acquiring around 80% of sub £450 per square foot properties (mostly in outer London) but only around 30% of £1,000-£1,500 per square foot properties (mostly in inner and 'prime' central London).

Overseas buyer activity varies by location as well - accounting for 50% of prime, 20% of inner London and only 7% of outer London (I think this is totals of investors and owner occupiers).

As always, figures from the property industry come with a big fat health warning (there's lots of private data and expert adjustments in use here) but I still found the overall numbers interesting - and a useful counter point to some of the media reporting which suggests much more overseas buyer activity.