City Center Housing in the UK: Prospects and Policy Challenges in a Changing Housing Market

Abstract

From the late 1990s, the city centers of English provincial cities have experienced significant amounts of new private sector housing development, mainly in the form of high-density flats. This new housing development was seen as a key component of the Urban Renaissance in English cities. It led to a large increase in the population of the central areas of the cities involved and provoked significant debate concerning potential gentrification and exclusionary impacts. More recently, however, a new set of concerns about the prospects and sustainability of new housing in city centers has emerged. It is suggested that a significant proportion of housing transactions in these areas involve investors. This investment activity has created a new dynamic in the housing market, with supply and prices increasingly reflecting investment demand, including short-term speculative acquisition of property. As the housing market turned down in 2008, questions were being asked about both occupier demand and investor demand for city center housing and, in this context, about the longer term sustainability of the form and type of new housing that has been developed. These issues were brought into sharp focus following the collapse of the US sub-prime market and the subsequent financial economic crisis. This paper uses evidence from a case study, the city of Bristol, to examine the changing city center housing market during a period when the housing market went into recession in the wake of the global financial crisis. It reviews the debate on the impact of market factors, including investor involvement on the housing markets of English cities, and policy factors in shaping the form of new housing developed. It also discusses the lessons that emerge for local housing and planning strategies, in particular, the extent to which the mix and type of new housing needs to be better managed.