Where are the right places for England's new homes?

Some houses. Image: Getty.

A housing white paper is due in the New Year, one which communities secretary Sajid Javid promises will get “more of the right homes built in the right places”. But where are the right places?

As we know, the housing shortage is not felt equally everywhere. Regional price growth has varied enormously since the crash. But even within regions there are large differences between areas. Nor can these problems be expressed purely in terms of house prices, either, because prices are determined as much by economic demand and speculation as anything else.

To try to establish a sense of the under-supply of new housing at a local level, we compared last year’s output against expected household growth, which is what you might say – not without a few caveats, admittedly – is the rate at which new homes are thought to be needed.

Nationally, the net supply of housing in 2015-16 was about 90 per cent of the annual household growth rate that is projected by government statisticians for the period 2019-39. But that national average disguises very large variations between areas that are producing more than enough homes, and others that are falling a long way short.

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Worse, those areas that are expected to grow most rapidly over the next 25 years are, on the whole, already performing least well against their household formation projections. London, which taken as a whole is the fastest-growing area of the country, had new homes equivalent to only 55 per cent of its long-term household growth rate. Only three boroughs (if you include the City of London; not technically a borough and tiny in population terms) built above that rate.

The next 30 fastest growing areas of the country after London fared similarly: only five were keeping up with their household formation projections, and 21 were not even doing as well as the national average of 90 per cent. London plus the next 30 areas that are expected to see the most household growth over the next 25 years – collectively accounting for 48 per cent of it – supplied just 36 per cent of new housing last year.

This was not confined to the South-East, either, but was an issue in places that are the focus of economic growth strategies, such as Greater Manchester (Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan), which supplied new homes equivalent to 68 per cent of its long-term growth rate. The West Midlands (Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton) managed just a little bit more, at 71 per cent.


This raises a variety of issues. The most obvious one, perhaps, is how do we ensure those areas with an under-supply build more homes? This is a many-faceted problem, of course, probably requiring local investigation, although quite a few people have justifiably pointed out a strong correlation between the red patches on this map – denoting a shortfall in housing – and the green belt.

But it also raises important questions about whether those areas that are failing so badly to keep up with household growth will ever keep up with it – and whether the answer doesn’t lie in trying to draw off demand to other areas.

In some case this might require only local movement. There are examples already in, say, Oxfordshire, which has a county-wide surplus of homes measured against household formation, despite a deficit in Oxford itself. This kind of thing lies at the heart of the planning system in the “duty to cooperate”, in which local authorities are meant to share the burden of household growth across boundaries.

But there are limits to this, as can be seen in London and the broad swathes of the South-East in which there are hardly any areas that are keeping up with their own household growth, never mind their neighbours’ too.

And so it may also require a degree of regional rebalancing, from London and the South-East in particular and towards some of those areas that are coping better already with household growth. This may happen naturally to some extent, as a result of these very pressures and their impact on house prices. But for demand to shift on a bigger, more meaningful scale would require substantial regional jobs growth, and the transport infrastructure to support it.

Where are “the right places” for new homes, then? Perhaps the more important question is: where do we want them to be?

Daniel Bentley is editorial director at the think tank Civitas and tweets @danielbentley. His briefing paper “Housing supply and household growth, national and local” was published this week.

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The ATM is 50. Here’s how a hole in the wall changed the world

The olden days. Image Lloyds Banking Group Archives & Museum.

Next time you withdraw money from a hole in the wall, consider singing a rendition of happy birthday. For today, the Automated Teller Machine (or ATM) celebrates its half century.

Fifty years ago, the first cash machine was put to work at the Enfield branch of Barclays Bank in London. Two days later, a Swedish device known as the Bankomat was in operation in Uppsala. And a couple of weeks after that, another one built by Chubb and Smith Industries was inaugurated in London by Westminster Bank (today part of RBS Group).

These events fired the starting gun for today’s self-service banking culture – long before the widespread acceptance of debit and credit cards. The success of the cash machine enabled people to make impromptu purchases, spend more money on weekend and evening leisure, and demand banking services when and where they wanted them. The infrastructure, systems and knowledge they spawned also enabled bankers to offer their customers point of sale terminals, and telephone and internet banking.

There was substantial media attention when these “robot cashiers” were launched. Banks promised their customers that the cash machine would liberate them from the shackles of business hours and banking at a single branch. But customers had to learn how to use – and remember – a PIN, perform a self-service transaction and trust a machine with their money.

People take these things for granted today, but when cash machines first appeared many had never before been in contact with advanced electronics.

And the system was far from perfect. Despite widespread demand, only bank customers considered to have “better credit” were offered the service. The early machines were also clunky, heavy (and dangerous) to move, insecure, unreliable, and seldom conveniently located.

Indeed, unlike today’s machines, the first ATMs could do only one thing: dispense a fixed amount of cash when activated by a paper token or bespoke plastic card issued to customers at retail branches during business hours. Once used, tokens would be stored by the machine so that branch staff could retrieve them and debit the appropriate accounts. The plastic cards, meanwhile, would have to be sent back to the customer by post. Needless to say, it took banks and technology companies years to agree common standards and finally deliver on their promise of 24/7 access to cash.

The globalisation effect

Estimates by RBR London concur with my research, suggesting that by 1970, there were still fewer than 1,500 of the machines around the world, concentrated in Europe, North America and Japan. But there were 40,000 by 1980 and a million by 2000.

A number of factors made this ATM explosion possible. First, sharing locations created more transaction volume at individual ATMs. This gave incentives for small and medium-sized financial institutions to invest in this technology. At one point, for instance, there were some 200 shared ATM networks in the US and 80 shared networks in Japan.

They also became more popular once banks digitised their records, allowing the machines to perform a host of other tasks, such as bank transfers, balance requests and bill payments. Over the last five decades, a huge number of people have made the shift away from the cash economy and into the banking system. Consequently, ATMs became a key way of avoiding congestion at branches.

ATM design began to accommodate people with visual and mobility disabilities, too. And in recent decades, many countries have allowed non-bank companies, known as Independent ATM Deployers (IAD) to operate machines. The IAD were key to populating non-bank locations such as corner shops, petrol stations and casinos.

Indeed, while a large bank in the UK might own 4,000 devices and one in the US as many as 12,000, Cardtronics, the largest IAD, manages a fleet of 230,000 ATMs in 11 countries.


Bank to the future

The ATM has remained a relevant and convenient self-service channel for the last half century – and its history is one of invention and re-invention, evolution rather than revolution.

Self-service banking and ATMs continue to evolve. Instead of PIN authentication, some ATMS now use “tap and go” contactless payment technology using bank cards and mobile phones. Meanwhile, ATMs in Poland and Japan have used biometric recognition, which can identify a customer’s iris, fingerprint or voice, for some time, while banks in other countries are considering them.

So it’s a good time to consider what the history of cash dispensers can teach us. The ATM was not the result of a eureka moment of a single middle-aged man in a bath or garage, but from active collaboration between various groups of bankers and engineers to solve the significant challenges of a changing world. It took two decades for the ATM to mature and gain widespread, worldwide acceptance, but today there are 3.5m ATMs with another 500,000 expected by 2020.

Research I am currently undertaking suggests that ATMs may have reached saturation point in some Western countries. However, research by the ATM Industry Association suggests there is strong demand for them in China, India and the Middle East. In fact, while in the West people tend to use them for three self-service functions (cash withdrawal, balance enquiries, and purchasing mobile phone airtime), Chinese customers consumers regularly use them for as many as 100 different tasks.

Taken for granted?

Interestingly, people in most urban areas around the world tend to interact with the same five ATMs. But they shouldn’t be taken for granted. In many countries in Africa, Asia and South America, they offer services to millions of people otherwise excluded from the banking sector.

In most developed counties, meanwhile, the retail branch and the ATM are the only two channels over which financial institutions have 100 per cent control. This is important when you need to verify the authenticity of your customer. Banks do not control the make and model of their customers’ smart phones, tablets or personal computers, which are vulnerable to hacking and fraud. While ATMs are targeted by thieves, mass cybernetic attacks on them have yet to materialise.

The ConversationI am often asked whether the advent of a cashless, digital economy heralds the end of the ATM. My response is that while the world might do away with cash and call ATMs something else, the revolution of automated self-service banking that began 50 years ago is here to stay.

Bernardo Batiz-Lazo is professor of business history and bank management at Bangor University.

This article was originally published on The Conversation. Read the original article.