What is causing ever accelerating house prices relative to most peoples’ pay

I have researched what’s causing house prices to rise and fall, as they have over several decades recently.

Having seen programs like BBC Two – Britain’s Housing Crisis, What Went Wrong?
it is clear that more detailed and renewed consideration is necessary to avoid further damage to our housing economy.

The BBC’s recently televised programs explain what the economists currently believe is causing the house price crisis facing homebuyers today.
However,  I myself have come to a very different conclusion from that of the academic community. This might be something to do with the fact that I was trained as a valuation surveyor in the sixty’s & seventies and I’ve watched the continued cycles of price changes from then, into and through the next millennium – with increasing incredulity.
Seeing this happening, up front and personal so to speak, and knowing how others were feeling about this, has driven me to find and diagnose the real causes. My explanations are not from the viewpoint of an economist but are exclusively from that of a qualified valuer or a working surveyor’s standpoint.

The conclusions I’ve reached are therefore not only unique and easy to understand but are fully able to be used to remedy the house price crisis which we are now experiencing.
What follows is a brief explanation of my findings. The rest of my web site explains my reasoning in full and I hope you enjoy what I am able to describe to you here.

What are actually causing ever accelerating house prices relative to most people’s pay levels are two separate Financialisation anomalies which are both culprits causing house price crises within our British housing markets.
They act rather like a sort of fog, wreaking havoc for those driving their cars but instead, this state of confusion is allowing excessive pricing to not only exist but to accelerate, especially during times of financial stress. My conclusion explains why during such times as we have seen, particularly more recently, house prices tend to keep on spiralling upwards, before the inevitable correction.

If both of these two legislative anomalies were to be removed, housing markets across Britain would start to match general affordability and would also become price stable. This would bring desperately needed price affordability back to those communities that need this for their very survival.

The legislative instruments creating these two anomalies were both conceived a good long time ago. It is therefore perhaps understandable that they have remained intact because each seemed logical when they were originally made into law.

In chronological order, the first of these (anomalies) was the logic of extending the work of estate agents to cover both sides of the sale process of individual houses, both on behalf of buyers buying and sellers owning these.

The original purpose of having estate agents, going back more than a century, was to create specialised offices, essentially to advise large estates belonging to landed gentry for whenever they wished to dispose of land and buildings deemed surplus to requirements. In addition, these offices would negotiate any purchases on behalf of the large landed estates. The estate offices would work solely on behalf of their employers, with a view to negotiating the best price able to be negotiated as and when required. 

The Estate Agents Act 1979 (enacted over 40 years ago), has since enabled estate agents legally to represent single house owners in selling such property as well as to allow any house buyer out there to also be represented. Unfortunately, doing this is causing what we now know of today as ‘Financialisation’ of the housing markets.

It is clear today that for individual house sales, agents should be limited to having to act for and advise the buyer primarily not the seller as well – in order to avoid causing the degree of house price inflation to which I am referring. However, to achieve this would require a change in the Estate Agents Act legislation.

A further explanation about this is given in the web page entitled: ‘This House Price Solution is devised to resolve the current housing crisis completely’. The link is below.

This House Price Solution is devised to resolve the current housing crisis completely

This explains that true market prices can only be determined by supply and demand in a perfect marketplace. In a perfect marketplace, the whole amount of homes on the market would be sold and the demand for them would also be fully satisfied at all times. The present UK housing market as a whole, is therefore very far from perfect!

IF, housing markets around the whole country were near perfect, economically speaking, it wouldn’t take a year or more for each house-move to happen. Houses and flats going onto the market would take much less than a year to attract a buyer ready to complete on their purchase. 

There would then be fewer unsold and empty properties waiting to find buyers. Supply and demand would be in balance. House prices would enable this to happen and would facilitate sales to take place more swiftly than upwards of a year.

On the rental side of things, here markets are in a very different situation. There are far more people wanting to rent than there are rental properties available. Also, the supply of flats and houses is shrinking currently, which is forcing rent-levels to inflate. Demand for these properties seriously outstrips supply, economically speaking. Here, the obvious solution clearly has to be to provide more properties available for rent.

It should be noted however, if there were to be less unsold properties at any one time, there would be a lessening of demand for properties to rent, because more tenants would’ve become buyers! Therefore, improving buyers’ markets would clearly help with lessening the rental-demand side of things as well. That would be an important added bonus for both marketplaces, which is why ‘The House Price Solution’ is the final answer.

The second, and equally damaging piece of legislation for house prices has been the longterm use of some of the provisions enacted under the Town and Country Planning Act 1947 (conceived over 70 years ago). This Act was the first major one to start directing how and when land could be developed, or used for different purposes. It specifically provided for such decisions ultimately to be decided using powers vested in the Secretary of State to appoint a planning inspector. These officers are effectively appointed by central government acting on behalf of The Crown, as being the ultimate owner of all land outright sitting above the legal estates granted in fee, such as freehold interests.

(For those who want to know a little more about land tenure this goes back in essence to William The Conquerer, after which time all land in Britain effectively belonged to The Crown. A freehold title granted by The Crown can be an estate in fee . An estate in fee simple, for example, is the highest estate possible with the least restrictions. However, even that state of ownership is subject to the laws of the land as and whenever they may receive Royal Assent.)

Rather importantly, there has just recently been a new Act of parliament which received Royal Agent on Thursday 26th October 2023. It augments the operation of the Town and Country Planning Act 1947 (as now amended). This new Act of parliament is called the Levelling-up and Regeneration Act 2023.
It has been prepared by the Department for Levelling Up, Housing & Communities and comprises approximately 530 pages, It underpins the government’s current levelling up agenda and covers among other things, provisions concerning local democracy and town and country planning. It covers additional details about Local Plan making and Neighbourhood Planning for example.

However, in this newly enacted legislation the Secretary of State still retains the power to finally determine planning appeals by using the existing method of appointing a planning inspector to determine planning applications on appeal, irrespective of the views of the local community or even the local authority, including ones submitted under the new Local and/or Neighbourhood Development Plan rules.

I contend that modern-day decisions on things like land use and planning should, from now on, be allowed to be made locally and democratically, rather than autocratically or dictatorially as happens currently using the existing powers vested in the Secretary of State to appoint a planning inspector.

I contend that whenever a planning decision has been decided at local level, that decision should no longer be able to be superseded on appeal by a planning inspector appointed by central government.

Whilst such determinations may have appeared to have worked well initially in the distant past, as the years have gone by, things of this nature have become more and more fraught. Nowadays, we are all very much aware of the discord surrounding decisions ultimately being decided by planning inspectors whom are appointed by central government. This often happens when they simply do not accord with what local communities actually want and require of course.

Unfortunately again, the damaging aspect of such centrally made decisions is what we know of today as ‘Financialisation’. The result of decisions such as these, being made remote from the communities directly involved, causes progressive damage to the very community that these were originally intended to protect. This occurs through the loss of essential residential uses such as those for local first-time buyers. The result is houses which are mostly priced out of local reach, for local people, and this is the last thing these people currently require.

My suggestion for resolving this is for government to vest those representing local communities with full responsibility for determining local residential planning applications depending on which uses are most needed within the community and as provided for within the democratically agreed and adopted Neighbourhood Plans, subject only to an appeal on a point of law (for example, if there had been some misdirection or misuse of the legal framework of the application or of its tenure of ownership).

[For clarification, this should also mean that instances of National Policy Framework considerations should be within the remit of local planning committees to make determinations.]

It would clearly require a significant change to the existing Town and Country Planning legislation in order to accommodate these new fundamentals.

A further explanation about this is given in the web page entitled: ‘Manifestos of those political parties looking to attract winning votes at the next general election should include the following’. The link is below.

Manifestos of those political parties looking to attract winning votes at the next general election should include the following

(This is about the manifestos of political parties looking to attract votes at the next general election.)

My conclusion is that with the twin changes pointed out here, local land use and the resulting prices of property being built, would be restored to price levels affordable by those living in their respective areas. Buyers could fairly compete to purchase residential property from sellers without interference by estate agents acting for sellers. Planning uses could be decided democratically using previously approved Neighbourhood Plans.

I contend there would be no downside from a governmental point of view, in accepting such proposals as I have outlined here.

As I say, top down solutions such as planning ones, especially residential planning applications, not only fail often but are becoming extremely unpopular for the reasons outlined. Devolving decision-making to those with the most to loose, (and/or gain), is the only logical alternative. I ask that these proposals therefore be thoroughly debated and I recommend that they be adopted very soon in order to deal with and fully resolve the exceptional difficulties now being experienced in satisfying modern-day housing need at affordable prices.

In peacetime (i.e. whilst our country is not at war with another), residential planning consents should be delegated to all local town or parish councils for them to determine, depending upon local housing need.

This way, genuinely democratic decisions may be arrived at using local decision-makers whom are best able to understand what the current needs of the community are at any particular time.

As a retired residential property valuer I remain convinced that if democratically elected local councillors were to be granted full authority to decide local residential planning applications, the effect of this could resolve the whole housing crisis.

Decisions made by such elected representatives would not be based upon NIMBYism ‘Not In My Back Yard’; quite the contrary!

Instead it would be a question of ‘IN My Back Yard’, as these councillors would be representing the wishes and needs of the local community – not simply trying to resist necessary change!

There could be no finer outcome than this, especially where residential property is concerned, because with this solution these councillors could work to actually resolve the housing crisis which we are now all being affected by, particularly owing to its increasing severity.

Outside links to the BBC:

Episode 1—Series 1 – How politicians promised home ownership, but with policies that sent prices out of reach.

Episode 2—Series 1 – How the strain on housing – from new builds to social homes – reached breaking point.


Watch exclusive interviews with the programme’s contributors

Finally, for more information on the necessary house marketing changes, go to:

The House Price Solution

How to Improve all local housing markets in England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution otherwise known as The Hendry Solution.

The new 2022 proposals by the Levelling Up Secretary Michael Gove were good.

The new 2022 Levelling up Bill was a breath of fresh air and would introduce new ways to speed up housebuilding. It would help new homes get built to a better specification, get built in the locations which need such housing, get them built more to the requirement of the local communities that need them and be priced more in-line with the level of affordability within those communities needing them.

Scrapping the previous and much debated Planning White Paper is therefore seen as being a very necessary decision, as this has failed to stimulate the building of the housing that people actually want in the places they want them and at the prices they can realistically afford.

The new White Paper is expected to change all of this.

Among the features in the new Bill will be:

Design codes enabling local communities to set rules about the layout of new developments and the materials which could be used.

A new infrastructure levy determined locally to raise the funds for projects such as schools, hospitals and roads by basing the levy on the value of the property when it is sold instead of as it gets planning permission.

More will be added here about this, as we hear more about it.

For the correct way to deal with the present and escalating housing crisis, you can simply search on The House Price Solution. This explanation is what would restore the housing markets across our land to rude health at long last. Here is the reasoning set out in brief.

I advocate a complete reorganisation of the way in which houses are bought, sold and rented in this country, which is long overdue.

In full response to the ‘lack of supply’ pontificators, whom are rather prevalent currently, the whole rationale or philosophy behind my carefully considered solution for restoring the housing markets around Britain to good health, embraces the wisdoms of bygone days. How so? There was a time when latin was in general parlance and the words: “Caveat Emptor” were in frequent use. The meaning of this should never have been forgotten.

This used to be an express warning which was applied especially where property or real estate was concerned. The words of the warning mean: ‘Let the buyer beware – unless they are covered by the seller’s warranty in terms of quality and worth’. The meaning of this simple latin saying amply describes why the current failures are occurring, manifesting within all housing markets up and down our still great country. 

We should remember this because in actual fact it is the one thing which is required, in order to restore and correct the damaging anomalies surrounding today’s accelerating house prices. As explained, these anomalies arise from our having departed from and forgotten what were previously well-known and established wisdoms, to be relied upon whenever undertaking commercial transactions such as those involving the buying of houses for family use.

The problem of unaffordable house prices today simply isn’t a supply-side matter at all. It is a price-side problem not a supply-side one. A-level students studying economics ought to know this! Once this is understood, the requisite changes to the way in which our housing markets operate across the whole country may be realised so that they may, once again become normality. Central government necessarily would need to take a lead in resolving this current-day house price crisis of course.

In the local area where I live for example, there are clearly more than a sufficient number of houses that certainly could be used to satisfy both present and future demand for residential housing but they are not coming onto the market. Instead they are being used for non-residential uses. It is this that needs addressing most urgently, not the headlong rush to build more houses to satisfy a purely notional lack of supply when in fact, there is a more than adequate supply of suitable property both in our locality and in plenty of other locations all over the place!

Please consider what is being explained here and raise any relevant questions on this for public scrutiny and discussion. A campaign ought to be mounted to bring this matter to the attention of our government should those interested in this wish that to happen.

The right formula for such a reorganisation is what now needs to be fully debated and once arrived at I am confident that the formula for change would embrace much of what I am presenting and is not only worthy of full scrutiny but is a correct formula for the necessary change and is overdue for adoption.

The explanation of how to peg accelerating house prices as well as delivering all the other housing market improvements desperately needed starts here. You can read all about these fresh new proposals at the following link:

The House Price Solution

How to Improve all local housing markets in England and Wales

Anybody who agrees with what is presented here should go and challenge their local MP asking them to properly examine this and get it fully and properly debated in The House of Commons without further delay.

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution otherwise known as The Hendry Solution.

Simply building more houses can’t solve the housing crisis

Obviously we need to get more houses built, both for rent and to buy but developing this as a strategy for calming the housing market is not going to remedy the prices uplift which we have recently experienced. It cannot do that simply because building more can’t achieve anything for as long as the considerable time it would take to actually complete the building of the extra housing required.

The market itself is in need of intervention and this does require the involvement of government. A government that can put effective policies into practice faster than the simple but over-quoted ‘build more’ idea.

My solution is to overhaul the way in which houses are marketed, both for sale and to let by changing the way agents themselves operate.

A more market friendly method is required so that house prices can be attuned more towards peoples ability to pay, with less of the speculative pricing by agents, whom currently act only for the vendor legally. It is this which requires urgent attention.

A more transparent housing market would not only take the froth out of asking prices but would have the added effect of calming rent levels too. For more information please go to the link below:

My proposal for the way housing in England and Wales should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones as described in The House Price Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.