How housing inequality is screwing up the country

Never gets old. Image: Getty.

The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.  

Some people get excited about their holidays, or the new Beyoncé album. I, however, have been almost uncontrollably excited since last week when my mole at the Centre for Cities let slip that it was publishing a report on the links between regional inequality and Britain's housing market. (Honestly, it was like Christmas Eve in my house last night. I left a bit of carrot out for Paul Swinney and everything.)

Anyway, to the report! Some key findings:

London saw the largest increases in housing wealth and Sunderland the smallest.

Yep, makes sense.

As housing wealth for homeowners in the Greater South East grows, so do rents for private renters.

Figures.

And then the kicker:

Planning policy has made urban homeowners in the Greater South East over £80,000 richer than those elsewhere in England and Wales since 2013.

...wowser.

Planning reform is needed to stop the gifting of wealth to homeowners in successful cities.

The planning system makes inequality worse and threatens financial stability.

Ouch.

Taken together, these points suggest that there are very few winners from our current system. That homes in one corner of the country are soaring in price far faster than those everywhere else is great if you own one, and are either happy to borrow recklessly against it or to sell-up and move somewhere cheaper. But they're bad for owners elsewhere, who relatively speaking fall behind.

They're also bad for renters in the south east, who are paying through the nose just so they don't need to sleep in the rain. They are bad for labour mobility, and thus for the broader economy. They are even bad for those who own a home in the south east, but may plausibly want a bigger home one day. They're bad for almost, but not quite, everyone.

What you really want is a map, though, so here you go. This one shows average housing equity – that is, value minus mortgage – in English and Welsh cities in 2013, with lower numbers in lemon yellow and higher ones in dark green. It also uses the size of the bubbles to represent how much that number had increased by 2018. What can we learn?

Click to expand.

The first observation is that there's a distinct correlation between colour and bubble size. You'd probably expect house prices in cities where housing was already expensive in 2013 to have increased by most in absolute terms – a 20 per cent increase of a large number, after all, is bigger than a 20 per cent increase of a small one.


But the bubble size doesn’t just represent absolute numbers. It represents the percentage of the figure where we started: house prices in expensive cities have not just gone up not just by bigger numbers, but by bigger percentages. As the book of Matthew warns, in not so many words: the rich get richer and the poor get stuffed.

Secondly, there's a very familiar north-south divide on show. That's there, sort of, in the 2013 prices – but there are also a few cities with low housing equity in yellow the London commuter belt (Luton, Ipswich, Swindon), and a few with higher numbers in green in the north (York, Warrington, Leeds). In other words, in 2013, there are some places in the north where high house prices made homeowners feel rich, and some in the south where lower house prices probably didn't.

The equity growth, though, is much more tilted towards the south east. Almost every city in and around London has seen significant increases in housing equity (one unlikely exception: Aldershot; no idea). And almost no city in the north has. Even York, the poster child for "basically a southern city at the wrong end of the country" has seen prices increases on a scale that would look a bit insipid in the north. Yet even, frankly, crap cities around London have seen house price booms, because, well, because they're around London.

While we're at it – here are the cities that have seen the largest increase in housing equity, and those that have seen the smallest.

Click to expand.

I'd ask if you can spot any patterns but you obviously can so it's pointless.

Anyway – you can read the full report here. And you can hear the Centre for Cities' head of policy Paul Swinney talking about this on next week's podcast. Told you it was worth leaving a treat out for him.

Jonn Elledge is editor of CityMetric and the assistant editor of the New Statesman. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

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The mountain in North Wales that tried to stop the UK’s blackout

Elidir Fawr, the mountain in question. Image: Jem Collins.

Last Friday, the UK’s National Grid turned to mush. Not the official term perhaps, but an accurate one after nearly one million people were left without power across the country, with hundreds more stranded at train stations – or even on trains (which isn’t nearly as fun as it might immediately sound). 

Traffic lights stopped working, back-up power failed in hospitals, and business secretary Andrea Leadsom launched an investigation into exactly what happened. So far though, the long and short of it is that a gas-fired power station in Bedfordshire failed just before 5 o’clock, followed just two minutes later by Hornsea offshore wind farm. 

However, amid the resulting chaos and inevitable search to find someone to blame for the outage, a set of mountains (yes, mountains) in North Wales were working extremely hard to keep the lights on.

From the outside, Elidir Fawr, doesn’t scream power generation. Sitting across from the slightly better known Mount Snowdon, it actually seems quite passive. After all, it is a mountain, and the last slate quarry in the area closed in 1969.

At a push, you’d probably guess the buildings at the base of the mountain were something to do with the area’s industrial past, mostly thanks to the blasting scars on its side, as I did when I first walked past last Saturday. 

But, buried deep into Elidir Fawr is the ability to generate an astounding 1,728 megawatts of electricity – enough to power 2.5 million homes, more than the entire population of the Liverpool region. And the plant is capable of running for five hours.

Dubbed by locals at the ‘Electric Mountain’, Dinorwig Power Station, is made up of 16km of underground tunnels (complete with their own traffic light system), in an excavation which could easily house St Paul’s Cathedral.

Instead, it’s home to six reversible pumps/turbines which are capable of reaching full capacity in just 16 seconds. Which is probably best, as Londoners would miss the view.

‘A Back-Up Facility for The National Grid’

And, just as it often is, the Electric Mountain was called into action on Friday. A spokesperson for First Hydro Company, which owns the generators at Dinorwig, and the slightly smaller Ffestiniog, both in Snowdonia, confirmed that last Friday they’d been asked to start generating by the National Grid.

But just how does a mountain help to ease the effects of a blackout? Or as it’s more regularly used, when there’s a surge in demand for electricity – most commonly when we all pop the kettle on at half-time during the World Cup, scientifically known as TV pick-up.

The answer lies in the lakes at both the top and bottom of Elidir Fawr. Marchlyn Mawr, at the top of the mountain, houses an incredible 7 million tonnes of water, which can be fed down through the mountain to the lake at the bottom, Llyn Peris, generating electricity as it goes.


“Pumped storage technology enables dynamic response electricity production – ofering a critical back-up facility during periods of mismatched supply and demand on the national grid system,” First Hydro Company explains.

The tech works essentially the same way as conventional hydro power – or if you want to be retro, a spruced up waterwheel. When the plant releases water from the upper reservoir, as well as having gravity on their side (the lakes are half a kilometre apart vertically) the water shafts become smaller and smaller, further ramping up the pressure. 

This, in turn, spins the turbines which are linked to the generators, with valves regulating the water flow. Unlike traditional UK power stations, which can take hours to get to full capacity, at Dinorwig it’s a matter of 16 seconds from a cold start, or as little as five if the plant is on standby.

And, designed with the UK’s 50hz frequency in mind, the generator is also built to shut off quickly and avoid overloading the network. Despite the immense water pressure, the valves are able to close off the supply within just 20 seconds. 

At night, the same thing simply happens in reverse, as low-cost, surplus energy from the grid is used to pump the water back up to where it came from, ready for another day of hectic TV scheduling. Or blackouts, take your pick.

Completed in 1984, the power station was the product of a decade of work, and the largest civil engineering project commissioned at the time – and it remains one of Europe’s largest manmade caverns. Not that you’d know it from the outside. And really, if we’ve learned anything from this, it’s that looks can be deceiving, and that mountains can actually be really damn good at making electricity. 

Jem Collins is a digital journalist and editor whose work focuses on human rights, rural stories and careers. She’s the founder and editor of Journo Resources, and you can also find her tweeting @Jem_Collins.