The Intermediary – February 2026 - Flipbook - Page 18
SPECIALIST FINANCE
In focus
Turning up the
volume on
housing delivery
T
here is a real danger in
presenting simplistic
answers to complex
and nuanced problems.
We all know that’s an
aention-grabbing
technique drawn from political
playbooks all around the world, but
maybe with housing, just maybe, it is
just as simple as... build more.
Looking at the revered problem
solving principle of “Occam’s Razor”
– where the simplest route and
explanation, requiring the fewest
assumptions, explains any given
phenomenon – it’s not too much
of a ‘hot take’ to suggest that there
isn’t a single political or buy side
interventionist policy that has worked
to stimulate the housing market,
unless we build more housing in the
UK for decades and decades to come.
We believe, we need to turn up the
volume on this issue, and this sector,
to ensure that happens.
Policy failure
There are solid arguments presented
that this simplistic approach may not
hold, with many new homes designed
as speculative investment assets,
oversupply in low-demand areas
creating stagnation, and the obvious
consumption of green space at an
unsustainable rate.
There is a great word in German,
‘verschlimmbessern,’ meaning “to
worsen by trying to improve,” that
we don’t really have a version of in
English. But maybe we should, given
the number of aempts we have had
at manipulating the markets in our
favour without realising that free
market interventionism rarely, if
ever, succeeds. Help to Buy was a great
example of this, the good intention
was there, a buy side stimulator, that
acted as a demand accelerator in a
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The Intermediary | February 2026
market choking on scarcity. The ironic
thing about the commodification of
housing is that ‘choking on scarcity’
drives value creation, so it plays into
the hands of investment speculators.
So, what do we mean by that?
Investors understand that this is a
politically managed market with a
permanently embedded supply-side
deficit. This deficit props up longterm demand, limits downside risk
and makes any policy intervention
unsustainable.
Historically bad policies have
created investable conditions, and
the challenge we face is to create
investment opportunities that
benefit the country and investors.
Without synergy between profits and
purpose, the housing situation will
only worsen.
Ongoing demand
By subsidising purchasing power
without unlocking new land
or speeding up construction
meaningfully, policies such as Help
to Buy did exactly what economists
foresaw: they pushed prices higher.
Developers priced in the subsidy,
buyers borrowed a lot more, and
affordability didn’t improve; it was
simply deferred.
The policy’s defenders argue that
it increased new-build supply, and
admiedly, it did. But not nearly
enough to offset the blizzard of
demand it unleashed. This is a
recurring paern, and the reasoning
behind our mission: government
policies historically treat access to
housing as a finance problem, when it
is fundamentally a volume problem.
At its core, we believe the UK
housing crisis is brutally simplistic.
For decades, population growth,
household formation, and investment
demand have outpaced new supply.
ALAN FLETCHER
is partnerships director
at Invest&Fund
For most of the post-war period, the
UK built housing at a pace roughly
in step with population growth
and household formation. That
alignment broke down in the late
1980s, and it has never recovered.
This isn’t a temporary shortfall. It’s a
cumulative deficit.
Planning constraints, landbanking incentives, and local
political resistance have ensured that
homebuilding never comes close to
meeting demand. Instead of tackling
that, policymakers have repeatedly
chosen the easier route: boost demand
and hope supply catches up later.
Every major housing policy starts
from the same flawed premise, that
affordability can be fixed without
changing how many homes exist.
That assumption underpinned almost
every failure that followed, whether in
planning reforms, rent controls, tax
stimulus, or monetary policy. Help to
Buy, shared ownership, Stamp Duty
holidays, and mortgage guarantees
are not really housing solutions. They
are demand accelerants introduced
into a market that cannot absorb them
without further inflation.
We believe the simplest route is
to build. The thousands of smaller
homebuilders in the UK have become
the survivors in a diminished market,
and we need that market to grow.
We also believe that empowering the
lenders and businesses to encourage
more smaller homebuilders back
to the table, through providing
the liquidity, the products, and
the support to do so, is the route
to building and finally turning
the volume up. ●
