Britain’s Housing Crisis Has Been Solved, Finds New IEA Report

It is easy to forget that just a decade ago, Britain was in the midst of an acute housing shortage. Britain’s homes were significantly fewer, smaller, and more expensive than those in neighbouring countries. Over one million people were on social housing waiting lists despite the UK’s large social housing stock. The promise of being part of Britain’s property owning democracy was dead for most people under the age of 35.

But according to new research by Kristian Niemietz, Editorial Director of the free market think tank, the Institute of Economic Affairs, this enormous drag on Britain’s economy has now been lifted after a decade of reform. A new generation of Brits can take cheap housing as a given.

A crucial set of reforms starting in late 2024 expanded planning permission and diluted the power of local obstructionists to block development (‘Nimbys’). These changes unleashed Britain’s biggest house building boom since before the Second World War.

This provided long-overdue relief for renters. “The flooding of the rental market with new rental properties has put landlords under a degree of competitive pressure they could not previously have imagined”, writes Niemietz. This result was that rents have declined, quality has improved and there are more choices for renters.

First-time buyers took advantage of increased competition as well, with real estate agents scrambling to attract the surge of young professionals and new families finally able to get on the housing ladder. More house building has reduced pressure on social housing, significantly cutting waiting lists and saving taxpayers money.

The benefits went far beyond the direct victims of the housing shortage. As house building brought prices and rents down, particularly in the Southeast and London, it became easier for people to move to areas with the greatest economic opportunity. This increased mobility pushed up productivity, wages, social mobility, and economic growth across the board.

As workers benefitted, so did business. The increase in available land for business and research helped the UK to attract more of the world’s top entrepreneurial and academic talent. It also freed up capital that was previously invested in artificially pricey properties for investment in productive assets.

Britain’s housing crisis has taken several years to solve, according to the report. The policy changes started off slowly, with the government paying off local anti-housing campaigners by transferring some of the benefits of local development directly to those most impacted by new housing.

The positive incentives for house building were turbocharged in 2025, when the government devolved new income tax powers to local authorities. This put local governments in a better position to upgrade infrastructure in line with new housing and incentivised more planning approvals due to the need to compete with other local authorities for tax revenue.

In 2026, the government expanded automatic planning permission on green belt land around commuter stations. As part of this plan, the government renamed the green belt the ‘Urban Growth Boundaries’ to reflect the fact that green belt designation is not related to environmental protection.

A cascade of pro-housing policies followed, including Street Votes and the revival of the New Towns Policy. The success of the new towns prompted a nationwide move towards rules-based planning systems, replacing the discretionary policy which allowed local obstructionists to grind housing and infrastructure development to a halt.

A tidal wave of construction followed. Housing stocks surged as cranes towered over London and Britain’s other major cities. The solution was simple: remove barriers to building, more houses will be built, and prices and rents will fall.

Niemietz concludes: “Why did Britain ever inflict this crisis upon itself? Why did this country so needlessly impoverish itself for so long? Why did Britain ever give so much power to a minority of obstructionists and troublemakers?”

The purpose of this report is not to come up with any novel policy ideas for how to solve the UK's housing crisis: the solutions have been there for years, and everyone who is even vaguely familiar with UK housing policy knows what needs to be done. All this report does is show what would happen if we actually did it.

The future described in this report is necessarily fictional – but it is not at all pulled out of thin air. If the political will were there, this could very easily become our reality.