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United Kingdom Faces Severe Housing Shortage Amid Immigrant Influx


The Bank of England says it is seeing signs that Britain's housing market is finally cooling off a little. That's after last month's vote to leave the European Union. A severe housing shortage has driven up prices a lot. That's in part because of an influx of EU immigrants in recent years.

NPR's Jim Zarroli looks at the role housing played in Britain's decision to leave the European Union.

JIM ZARROLI, BYLINE: On a drizzly afternoon, Kevin Fitzgerald stands on a narrow country lane in England's Hertfordshire County.

KEVIN FITZGERALD: Now, just look at it out here. It's just beautiful countryside. It's farmland. This field we're standing in is growing a crop, which looks like barley. Behind us, small paddocks, horses there. You certainly wouldn't know London was 30 miles down the road.

ZARROLI: In the United States, developers would have turned these fields into suburbs long ago. But Hertfordshire is part of London's enormous green belt where development is strictly limited. Fitzgerald, who's a volunteer with the Campaign to Protect Rural England, says without the green belt, this area would be a much different place.

FITZGERALD: Had development gone ahead without any sort of check like this, we would be sitting in the middle of a massive urban sprawl covering a quarter of the whole country.

ZARROLI: But today, Hertfordshire is under pressure. The U.K. suffers from a housing shortage. It needs 240,000 new houses a year. It builds about half that, says longtime real estate executive Jeremy Leaf.

JEREMY LEAF: So clearly, there's a shortfall. It's been going on for so many years. It's now estimated at about 1 million homes. And we can't satisfy that demand.

ZARROLI: As a result, housing prices have been rising by 10 to 15 percent a year. One problem is that land is in short supply. But there's another factor. Henry Gregg is with the National Housing Federation, which represents nonprofit housing associations. Greg says it's hard to get local governments to approve new housing in Britain.

HENRY GREGG: The planning system is very much built on kind of development control as opposed to actually what does the community need? What does business need? And responding to that. It gives a lot of opportunity for opposition and for people to slow down the process.

ZARROLI: But as prices have soared, Parliament has required towns to draw plans for new construction. And there's been pressure to build on the green belts, which make up 13 percent of England's total land. Green belt protectors argue that there are better places to build, such as former industrial sites. Kevin Fitzgerald says the controversy no doubt played a role in the Brexit vote.

FITZGERALD: When you're bringing people into the country in the several hundred thousand per year, it has to have an impact on housing. It is quite a small country. And because when they move into London, people from London move out. And this is where they move to or want to move to.

ZARROLI: This dispute highlights an ongoing ambivalence about development in Britain, where rural life has long been celebrated. Gregg says attitudes toward development have to change before the housing shortage is addressed.

GREGG: People don't always make the connection. They say, well, my kids can't find a place to live. But at the same time, I'm opposed to this local housing development. That's - the two things are kind of contradictory because you need to have new housing in order to make it affordable to kind of the next generation.

ZARROLI: Gregg also notes that the EU provides most of Britain's building materials, not to mention, its construction workers, which means once the U.K. leaves the EU, the housing shortage may get worse. Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.