Are we all NIMBY's?

The Not In My Back Yarders must be having a party!

The governments proposed plan to hold local referendums on new housing schemes in England which will require 80-90% of local people to approve new building schemes in villages would likely bring projects to a halt. Lord Taylor of the Rural Commission captured the problem well when he said

"What they will do is create not a right to build, but a right to block for a very small number of 'nimbys'”


It could be argued that even getting 80-90% of residents to turnout and vote would be a challenge in most locations. However setting a 90% benchmark for approval is just ridiculous. Planning in this country is hard enough to overcome, and allowing 'local resident's' to have a veto is definitely a bridge to far.

It's an interesting point though, because neighbours are definitely stakeholders in their surroundings and there already exists not only consultation systems regarding planning, but legislation to protect a landholders interests from neighbouring activity. But a balance has to be found between existing residents rights, and the needs of those with no home. At present the advantage definitely lies with existing homeowners.

The seemingly un-stoppable rise in house prices in the UK is, I believe, primarily driven by supply & demand. Of course house prices we are told are a factor of incomes, which to a certain extent they are. However the laws of supply and demand cannot be ignored.

We have seen a large rise in asset prices over the last twenty years despite consumer price rises remaining modest. Consumer prices are of course measured through inflation statistics, CPI and RPI, however to my knowledge there is no similar measure of asset prices. If statistics were published on the performance of asset prices, by which I mean property prices, equities, and other popular investments, this 'asset inflation' would be more identifiable. After all, to a large extent it was this asset inflation which the Bank Of England couldn't control though interest rates and contributed or caused the latest crisis.

This asset inflation has served to enrich existing asset holders, who particularly in the case of property would be older people who held property assets before 1990. As they realised the profits of this gain they of course reinvested them in the same market. Obviously many lavished the profits on luxury spending which goes some way to explain the recent success of luxury brands like Waitrose, John Lewis, and M&S, but sufficient numbers of them reinvested the proceeds in the same market that had rewarded them so richly before. This new investment money is what has made up the gap between incomes and house prices.

Of course, increasingly lax mortgage terms and low interest rates have also allowed greater participation and additional money, but I don't believe this should be seen as a bad thing. Yes, the banks do have many non-performing mortgages but they are not comparable with the US sub prime problem, and are lower even than the number during the 1992 recession. Most non-performing loans occur in the self-cert market or so called 'liar loans' business. These were mortgages given where no evidence of repayment capacity was required which is of course crazy. That doesn't however mean that 100% mortgages for first time buyers where sufficient income is evident to provide for repayments are a bad idea.

The point I have been coming around to (I seem to have drifted from the topic of NIMBY?'s), is that NIMBY's are known for taking action against development plans in their location. However with so much investment money pouring into the housing market, and so much of the economy now reliant on the continual rise in house prices, a large portion of the population now have a vested interest in restraining the supply of new homes, even nationally. Headlines about house price rises are often cheered in the press and falls met with dismay and pictured with rain clouds. Can anyone think of another living cost that is cheered when the price rises?

The governments plans to give residents a new build veto is in effect a huge barrier to new houses anywhere. We have become a nation on NIMBY's, and central government initiatives to strengthen this movement represent a frightening development.

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