Big costs for tiny houses: exploring the transaction costs of developing tiny houses in England

Abstract

The housing market in England is in crisis, in terms of both availability and costs of housing. Although it is not a solution for everyone, many advocates of the tiny house movement promote developing small houses that are financially affordable and environmentally sustainable. There is limited research on tiny houses, and the hidden costs of developing this type of housing have not been investigated. This paper addresses this gap through exploring the perceived transaction costs associated with developing tiny houses in England, and how these costs can be reduced. It was found that there are considerable transaction costs in different stages of the development process, including searching for information, finding suitable land, obtaining planning permission, and constructing the house. The paper concludes that tiny houses require enabling legislation in planning policy so that planning permission is easier to obtain. Also, awareness of tiny houses needs to be raised so that local planning authorities and the public understand the concept better.