Paul Smith is Managing Director of the The Strategic Land Group Ltd. Here, he tells Housing View and Brookbanks about the unaffordability of homes, the systemic changes he would like to see, and how tragedy in New Zealand led to housing reform
by Ben Wakeling
This article accompanies a podcast hosted by Brookbanks – watch the whole conversation now.
My first question to Paul Smith is rather broad, and a little clunky: What is the housing crisis?
Smith, thankfully, remains unfazed. “I think we all instinctively know what it is,” he says, “which is that houses are really expensive, and very much out of kilter with incomes these days.”
The figures are stark: Nationwide’s house price index for March 2026 reveals that the UK house price to earnings ratio sits at around 5.6 – lower than the high of almost 7.0 in 2021/22, but still far too high.
It’s the “consequential problems” though, says Smith, that are the often-unseen challenges which arise from the large gap between house prices and what people can afford to pay. The number of ‘concealed families’ – households which would form if there were a house available for them to move into – has risen from around 1.8 million in 1997 to 2.6 million now. These are people who would start families, given the opportunity, but the housing crisis is blocking this.
“There’s a great essay called ‘the housing theory of everything’ which talks about how some of these impacts then start filtering into other areas, things that you think are unrelated, like fertility rates, obesity rates. The unaffordability of homes has an impact on all those. It’s a huge issue. It’s one of the biggest problems that we face in the UK.”
Smith illustrates this problem with personal experience. He lives in a three-bed semi-detached house in the suburbs of Manchester (“not a particularly grand house,” he says). The deposit he paid was more than his parents paid to buy their first house.
“I know some of that is inflationary factors, but as house prices become more and more expensive it takes longer and longer to save up the five or ten per cent deposit that is necessary to unlock the mortgage, even if you’ve been making rental payments that have been that level for years.
“Owning a home is still the number one preferred tenure for an overwhelming majority of the population. But there are also increasing numbers of people who say that they don’t think they will ever be able to attain that.”
When you start from a low base, it takes a long time to get the system moving again.
As a chartered town planner, Smith understands the impact the current planning system has on the housing crisis. He also understands, however, that reforming the planning system is not a quick process.
“It takes a long time to change the trajectory,” he says. “To turn planning reform into a home for somebody to live in takes three years from changing the policy before you start to see the impact of it. The position the government inherited meant it was always going to be a virtually impossible task.
“The danger is we get too fixated on ‘will the government hit the one-and-a-half million homes this parliament’, and when it becomes obvious that they won’t, that provides an opportunity to say: ‘Well, you’re doing all the wrong things.'”
For Smith, it’s about “making sure that the arrow is pointing in the right direction, and that we can hit those higher levels of delivery in future years.”
“When you start from a low base,” he comments, “it takes a long time to get the system moving again.”
Smith has looked outside UK borders to seek an answer to the country’s planning challenges. He’s spoken to planners in the USA, Netherlands and New Zealand, where national tragedy prompted a change in the planning system – with intriguing results.
“I had a really good conversation a couple of months ago with Stuart Donovan, an economist from Auckland, and they’ve done it three times there,” he recalls. “They did it in Christchurch after the earthquake, where the government was concerned that house prices would increase rapidly because of the number of homes that had been damaged. They liberalised the planning system to allow denser developments, and actually house prices didn’t go up at all.”
The New Zealand government did the same in Auckland – one of the most expensive cities in the world – introducing denser developments near transit stops (an idea replicated by the UK in the draft NPPF). Housing costs in the city have since become more affordable.
Buoyed by these successes, the government introduced a similar set of reforms in the Hutt River region of the country, on the southern tip of the northern island (“a place which nobody’s ever heard of unless you’re a planning geek like me.”). They introduced a similar set of reforms and, unsurprisingly, got the same results.
We need to find a way of getting back to allowing settlements to gradually evolve, like they’ve done throughout history.
These planning reforms also had no effect on design quality, according to Smith’s research. The design and ‘beauty’ of new homes has hit UK headlines in recent years, with many large housebuilders accused of sacrificing design for density.
Smith disagrees. “I think housebuilders of all types get a bad rep for the quality of schemes they deliver,” he remarks. “When you walk around a new-build housing development that has just been finished, it looks very different than if you walk around that same scheme ten years later when all the landscaping has matured, and the sharp edges of the bricks have softened.”
The clock is ticking: I only have time for one more question. What would you like to see implemented that hasn’t been talked about, I ask.
Smith’s answer has two parts. Firstly, the planning application process has to be “as well-oiled a machine as possible”, with a cradle-to-grave review of efficiencies.
Secondly, the country has to allow its settlements to grow “upwards and outwards” in an organic way, instead of the current revolutionary process where development spikes once a new local plan is implemented, only to taper off over time.
“We need to find a way of getting back to allowing settlements to gradually evolve, like they’ve done throughout history. For ‘upwards’, we need a policy presumption that says you can build a new home that is no more than one storey higher than neighbouring properties, so that over time you get areas gradually densifying.
“For ‘outwards’, I would look for permeable or flexible settlement boundaries. At the moment, the edge of a settlement is a very hard divide between where you can build and where you can’t build, but I think we should be looking at how we can sensibly grow beyond those.”
There can be caps put in place to prevent sprawl, says Smith: perhaps one per cent per annum, so that a village of a hundred homes might get a new development of ten homes somewhere along its boundary every ten years.
“I don’t think that it’s a big ask, or something that will dramatically change the feel of the settlement,” he says, “but I think it starts to allow gradual slower change to increase the baseline rate of development.”
Housing View 