This article first appeared in The Times.

The economist Kate Barker rang alarm bells about insufficient homebuilding two decades ago. Now she can do something about it.

Twenty years ago the economist Kate Barker blew the whistle on Britain’s homebuilding shortage in a landmark government review. Just as she warned, the divide between the have-homes and the have-nots has widened. Indeed, her younger son lived with her until he was 30 because he could not afford his own home. But today Barker, 66, is invigorated.

“It’s a very exciting time at the moment, isn’t it?” she says as we meet amid a volley of what she calls “startling” planning announcements by the new Labour government. Days later Barker is made deputy chairwoman of the task force that will spearhead the generation of new towns — billed as the “largest housebuilding programme since the postwar period”. She is now in charge of helping to end the housing crisis she had warned of all those years ago.

By happy coincidence our interview takes place at the London hotel Barker frequented during the writing of her seminal review, and over the ten years she served on the Bank of England’s rate-setting monetary policy committee, a role she had until 2010. Thoughtful and fiercely intelligent, she is already waiting when I arrive 15 minutes early. “It’s a good corner, this,” she says, nodding approvingly.

Gordon Brown, then chancellor, described Barker’s 2004 report on housing supply as the “most detailed housing review in 50 years”. Commissioned by the Treasury, it was seen as a blueprint for future governments to address affordability problems. It remains this century’s most significant review of housing supply, a Home Builders Federation (HBF) report said this year.

In a warning that is as prescient today as it was 20 years ago, Barker wrote at the time: “I do not believe that continuing at the current rate of housebuilding is a realistic option, unless we are prepared to accept increasing problems of homelessness, affordability and social division, decline in standards of public service delivery and increasing the costs of doing business in the UK — hampering our economic success.”

She did not expect people would still talk about her review two decades on. “I’m both surprised that it’s lasted so long and slightly irritated that people don’t remember what was in it.” For one, Barker is “slightly distressed” that the “steep” government target of 300,000 new homes a year has been ascribed to her review. “You won’t find it there.”

Her numbers were more complicated, setting out three affordability scenarios. However, the HBF has calculated that England is two million homes short of the number that would have been built under Barker’s most ambitious scenario.

Even in the 2010s Barker says she was reluctant to use the term “housing crisis”. But it has “got insidiously worse year by year. It now has reached a point where I’d say it is a crisis,” she says. “It’s a boiling frog, isn’t it? You go along saying, ‘Oh, it’s not quite that bad, it’s not quite that bad.’ And I think, ‘Oh no, it is really bad.’”

When did it tip over the edge? Barker says she had thought house prices were higher because interest rates were lower. When rates started to rise, she expected house prices to fall more than they did. “I hadn’t anticipated that we’d see such a big rise in rents … If the housing market hadn’t been very tight, [private landlords] wouldn’t have been able to pass the rents on because people would have had more options.”

Since her 2004 review the backlog has almost quadrupled. Households with unmet housing needs have grown from 950,000 to 3.7 million. That includes those who are homeless; living in temporary accommodation such as hostels; in overcrowded, unsuitable or unaffordable homes; and hidden households, such as adult children still living with their parents.

Barker’s son was one of them. Nine years ago I asked Barker what the housing crisis looked like for her. “My younger son is homeless,” she told me. He boomeranged back home after graduating from university, but earned too little to rent his own place.

“It’s very awkward talking about my family,” Barker says when I ask about him again, but graciously expands to highlight the “intragenerational problems” of the housing shortage. “I’m afraid I helped both my sons with mortgage deposits — my younger son has finally left home.” He lived in the family’s three-bedroom house, in a large Essex village, for about ten years after university.

She finds it striking that, in the space of a decade, from 2011 to 2021, nearly three quarters of a million more adult children are living with their parents. “Is that a social evil? It was quite nice in Covid with my youngest son there. But actually it constrains people’s job search.” It did for her son, Barker says. “When you’re setting up a family house, you don’t think of living somewhere that’s going to enable job search for your children in their twenties … It is a problem.”

One of Barker’s biggest disappointments is the failure of successive governments to build enough homes for social rent. “Because of the right to buy we have not added to the stock of social rent in the last eight years. It really takes me aback.”

She became an economist because she was choosing her A-level subjects during the Opec crisis in the 1970s, when inflation was very high. “That was very damaging to my family’s finances and I wanted to understand why.” Barker also wanted to leave her all-girls school, which — handily for her — did not offer economics. Instead she went to a sixth form in Stoke-on-Trent. “I had a great economics teacher. I just loved it.” That decision changed her life.

Now, on the New Towns task force, led by Sir Michael Lyons, she will change Britain. While some new towns will be inspired by the 32 developed after the Second World War (now home to almost three million people), most will be large urban extensions and regeneration schemes of at least 10,000 homes each.

Barker’s review called for greater use of new towns and development corporations. She is still supportive of these. “Development at the moment is too often about tacking little bits onto places. So again you get a bit of a boiling frog because they grow and then they can’t quite cope with it.”

But she does not underestimate the issues around new towns. Take the extension of Cambridge. “Twenty years ago a lot of people talked to me about Northstowe … and it’s really only now taking shape as a place.” One reason for the delay was the widening of the A14 main road. She finds it remarkable that the government has “persistently” failed to “really tie up infrastructure provision where they want new housing”. To ensure this happens, Barker — as chairwoman of a housing commission by Radix Big Tent, a think tank — recently urged Labour to create a cross-government unit.

She argues that the green belt around London, in particular, should be reviewed at a regional scale — not by individual boroughs, as is now the case. “This would be quite a controversial thing. But without taking that more holistic view, I don’t see how you could ever quite arrive at satisfactory answers.”

She approves of Labour’s plans to make it easier to build on low-quality “grey belt” land in the green belt, where most new buildings are otherwise banned to limit sprawl. One of the things she found most surprising about planning 20 years ago was a statement that the “essential characteristic” of green belt — which has nothing to do with protecting nature — is its “permanence”. That wording is still there.

Thinking back to her landmark review, is there any positive news? Labour’s return to mandatory housing targets gives Barker hope. There also “seems to be a real will” to tackle the retrofitting of Britain’s old and energy-inefficient homes, she says.

On that point her Radix commission recognises that insulating homes isn’t necessarily the best way to achieve climate neutrality. “You will get better bang for your buck by different heating methods. Because fabric first is very expensive.”

While Barker has solar panels at home, she is still contemplating a heat pump. “But it’s like being an early adopter. We’re all slightly worried about it because we’re not quite sure. So we probably need more of a government lead on technology and more examples of where it’s worked. I certainly won’t put another gas boiler in.”

The Radix commission also had lively debates about homes for older people. “We’re all a bit like cats. We get very attached to the places where we live, so we find it difficult to move.” Building more attractive places for older people to move to, and enough support with the physical difficulties of moving, would help, she says. “But the idea that we would end up with a perfect number of bedrooms and that you would never allow anybody to have extra space is nonsensical. Since Covid a lot of people will be using the extra space in their house effectively as office space.”

She finds it “startling”, too, that over-55s are talked about as older. “I was 55 but still had my youngest son at home, so I had no idea that I should be going off somewhere small.” Instead Barker is going big to build those new towns.

Beyond Barker 

Key findings 

• England would have two million more homes today if Kate Barker’s most ambitious scenario for increasing housing supply had been realised. This shortfall is equivalent to the entire housing stock of Ireland, or the number of homes in the urban areas of Manchester and Birmingham combined.

• Looking at Barker’s central affordability scenario (requiring 240,000 homes to be built a year), England has still fallen 900,000 homes short of the total number needed to make the market more affordable over the past 20 years.

• Only 11 of the 36 recommendations of the Barker Review are in place — with a further 10 having only been partially implemented. Five recommendations were implemented and then reversed.

• Changes to the National Planning Policy Framework undermined progress in implementing three of the review’s recommendations — those relating to targets, the allocation of land by local authorities, and the green belt.

• Most indicators of housing affordability have worsened in the 20 years since the review’s publication.

“The prospect of 300,000 new homes a year in England seems as far off today as it did in
2004” Kate Barker, April 2024, in the forward to Beyond Barker (HBF), hbf.co.uk