In the news

Lloyds Banking Group and Barratt have formed a new venture with the government housing agency Homes England to plan large-scale projects to build thousands of homes.

Well that's worrying. Barratt are, or were, being investigated by the Markets and Competition Authority because of their buyout of Redrow. The housebuilding industry in this country is already stupidly concentrated, financialised, and run as an oligopoly. Having a government-backed private finance venture is a step in the completely wrong direction if we want a functioning housing system.

From the FT (https://archive.ph/mhksg):

The trickier debate is whether consolidation will lead to more houses being built in the UK’s chronically undersupplied market. In theory it might. Housebuilders build only when they can sell homes and make a decent profit. Hence, Barratt completions were down 29 per cent in the six months to December, as rising rates curbed demand.
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A bigger group should be better able to navigate the headwinds of regulation, planning and building cost inflation. Once demand returns it could, perhaps, produce more houses. Indeed, cost savings estimated at £90mn, in line with industry averages from previous deals, should be worth in the region of £700mn once taxed and capitalised.

The more cynical view is that, given that the biggest cost of a new building is land, greater concentration of the stuff may mean more scope to control local housing supply and prices.

This is worth a read too — "How big UK housebuilders have remained profitable without meeting housing supply targets": https://theconversation.com/how-big-uk-housebuilders-have-remained-profitable-without-meeting-housing-supply-targets-215757

And on a separate but related note, I'm constantly surprised in debates about the housing crisis that it's always framed purely as a supply problem. What's always left unsaid is that we've got more houses and bedrooms per person than we've ever had in aggregate, yet prices still rise uncontrollably.

There are of course shortages in major cities, but dealing with housing primarily as a financial asset is crucial to bringing prices down. When seen as an asset the fixes are obvious. Providing non-market alternatives in the form of social housing and housing co-operatives, strengthening tenants rights, implementing reasonable rent controls, rebalancing the distribution of ownership through land taxation, or more interesting policies like a right of first refusal, are all more important than the number of units built.