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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Leeds is still haunted by its pledge to be the “Motorway City of the Seventies”

Oh, Leeds. Image: mtaylor848/Wikimedia Commons.

As the local tourist board will no doubt tell you, Leeds has much to be proud of: grandiose industrial architecture in the form of faux-Egyptian temples and Italian bell-towers; an enduring cultural legacy as the birthplace of Goth, and… motorways. But stand above the A58(M) – the first “urban motorway”  in the country – and you might struggle to pinpoint its tourist appeal.

Back in the 1970s, though, the city council was sufficiently gripped by the majesty of the motorways to make them a part of its branding. Letters sent from Leeds were stamped with a postmark proudly proclaiming the city's modernity: “Leeds, Motorway City of the Seventies”.

Image: public domain.

During the 1960s, post-war optimism and an appetite for grand civic projects saw the rapid construction of motorways across England. The construction of the M1 began in 1959; it reached Leeds, its final destination, in 1968. By the early 1970s the M62 was sweeping across Pennines, and the M621 loop was constructed to link it to Leeds city centre.

Not content with being the meeting point of two major motorways, Leeds was also the first UK city to construct a motorway through the city centre: the inner ring road, which incorporates the short motorway stretches of the A58(M) and the A64(M). As the council put it in 1971, “Leeds is surging forward into the Seventies”.

The driving force behind Leeds' love of motorways was a mix of civic pride and utopian city planning. Like many industrial cities in the North and Midlands, Leeds experienced a decline in traditional manufacturing during the 1960s. Its position at the centre of two major motorways seemed to offer a brighter future as a dynamic city open for trade, with the infrastructure to match. In response to the expansion of the roads, 1970s council planners also constructed an elevated pedestrian “skywalk” in an attempt to free up space for cars at ground level. Photos of Leeds from that time show a thin, white walkway running through blocky office buildings – perhaps not quite as extensive as the futuristic urban landscape originally envisaged by planners, but certainly a visual break with the past.

Fast forward to 2019 and Leeds’ efforts to become a “Motorway City” seems like a kitsch curiosity from a decade that was not always known for sustainable planning decisions. Leeds’s historic deference to the car has serious consequences in the present: in February 2019, Neville Street – a busy tunnel that cuts under Leeds station – was found to contain the highest levels of NO2 outside London.

City centre planners did at least have the foresight to sink stretches of the inner motorways below street level, leaving pedestrian routes largely undisturbed. Just outside the centre, though, the roads can be more disruptive. Sheepscar Interchange is a bewildering tangle of arterial roads, Armley Gyratory strikes fear into the hearts of learner drivers, and the M621 carves unsympathetically through inner-city areas of South Leeds with pedestrian access restricted to narrow bridges that heighten the sense of a fragmented landscape.

 

Leeds inner ring road in its cutting. Image: author provided.

 

The greatest problem for Yorkshire's “Motorway City” in 2019, however, is not the occasional intimidating junction, but the complete lack of an alternative to car travel. The dire state of public transport in Leeds has already been raised on these pages. In the early 20th century Leeds had one of the most extensive tram networks in the country. The last lines closed in 1959, the same year construction began on the A58m.


The short-sightedness of this decision was already recognised in the 1970s, as traffic began to build. Yet plans for a Leeds Supertram were rejected by successive Conservative and Labour governments unwilling to front the cost, even though smaller cities such as Newcastle and Sheffield were granted funding for light transport systems. Today, Leeds is the largest city in the EU without a mass transit system. As well as creating congestion, the lack of viable public transport options prevents connectivity: the city's bus network is reasonable, but weaker from East to West than North to South. As a non-driver, I've turned down jobs a short drive away that would be a logistical impossibility without a car.

Leeds' early enthusiasm for the motorway was perhaps premature, but there are things we can learn from the 1970s. Whatever else can be said about it, Leeds' city transport strategy was certainly bold – a quality in short supply today, after proposals for the supertram were watered down to a trolleybus system before being scrapped altogether in 2016. Leeds' rapid transformation in the 1960s and 70s, its grandiose visions of skywalks and dual carriageways, were driven by strong local political will. Today, the long-term transport strategy documents on Leeds City Council's website say more about HS2 than the need for a mass transit system within Leeds itself, and the council has been accused of giving up the fight for light rail and trams.

Whilst central government's refusal to grant funds is the greatest obstacle to Leeds' development, the local authority needs to be far more vocal in demanding the transport system the city deserves. Leeds' desire to be the Motorway City of the Seventies might look ludicrous today, but the political drive and utopian optimism that underpinned it does not.