Published by UK Collaborative Centre for Housing Evidence (CaCHE)

Key arguments;

• Post-GFC, the big three successfully adopted a “margins over volume” strategy, allowing them to generate large amounts of cash, most of which has been returned to their shareholders.
• The state played a crucial role in increasing their profit margins, through two main interventions, both of which benefitted larger housebuilders over smaller housebuilders;
  • Mortgage market support schemes which (likely) inflated their sales prices, and allowed them to wind-down their own shared equity schemes.
  • Renegotiation of section 106 agreements and the subsequent liberalisation of the planning system.
• The state’s prioritisation of large sites in the planning system also provided the big-three with (monopsonistic) market power, keeping down the input cost of their land.
• The state shaped the land and housing market in this way because it perceived itself as a necessarily passive actor in the production of housing, reliant on the structural power of the largest housebuilders.

We conclude that in order to expand housing supply in a way that aligns with social and environmental needs, the state needs to recognise its own structural power, and assume a larger and more active role in the housebuilding and land market.