‘Stop‐go’ policy and the restriction of postwar British house‐building

Abstract

From the mid-1950s to the early 1980s the Treasury and the Bank of England successfully advocated a policy of restricting both private and public sector housebuilding, as a key but covert instrument of their wider 'stop-go' macroeconomic policy framework. While the intensity of restrictions varied over the economic cycle, private house-building was restricted (through limiting mortgage availability) for almost all this period. This was achieved by keeping building society interest rates low relative to other interest rates and thus starving the building society movement of mortgage funds. Mortgage restriction was never publicly discussed and sometimes operated alongside ambitious housing targets and well-publicized policy initiatives to boost housing demand. This article outlines the evolution of house-building restriction, together with its impacts on the housing sector and the wider economy. We review the evolution of the policy framework and its consequences, compare the level and stability of British house-building during this period-historically and relative to other countries-and undertake time-series econometric analysis of its impacts on both house-building and house prices. Finally, implications for debates regarding stop-go policy, Britain's housing problem, and the distributional consequences of government macroeconomic policy are discussed.

Financial Tools with the State Support. The Case of Building Societies in Czechia

“…On the other hand, if building societies do not respond more to the current growth of basic interest rates by increasing the rates offered on deposit products, as is the case with traditional savings accounts, the resources of building societies may starve. Scott and Walker (2019) describes similar circumstances on the example of building societies in the UK.…”

“…According to recent publications in the Web of Science database, these are authors mainly from those countries where building societies actually operate, such as the United Kingdom, Germany or the Czech Republic. For example, Scott and Walker (2019) focus on post-war Britain housebuilding and restrictions affecting the availability of housing loans (mortgages) in the building society system. Molterer (2019) focuses on building societies as special financial intermediaries, analyzing 41 years of data from the German economy.…”

A “Quiet Victory”: National Provincial, Gibson Hall, and the Switch from Comprehensive Redevelopment to Urban Preservation in 1960s London

“…54 The government's parsimony reflected Treasury pressures to keep building costs down, part of a broader "stop-go" policy of restricting building and public investment expenditure in order to avoid inflationary pressure on sterling and thereby accelerate the reestablishment of London as a leading financial center. 55 However, in this instance the policy spectacularly backfired, with long-term negative implications for developers' freedom to modernize the City's physical infrastructure.…”