In October 1918, a British soldier, Jim Coote, fighting on the Western front wrote home to his sister that he was surprised she was getting married, but realized the decision was based on the need to obtain a good home while they could since ‘things will not be half as good and double the price later on’. He was right, and problems of housing affordability – the subject matter of this book – have never fully disappeared. Despite strongly held views, there are no simple solutions, since housing outcomes are the result of sets of interrelated complex forces. Yet, an understanding of the underlying causes is a prerequisite to any improvement in housing conditions.

The book is based on our academic research conducted over many years but includes new ideas as well. It has also been stimulated by frequent contact with those working within government and in the housing sector in order to address ‘real world’ problems; these interactions have kept our work grounded. Policy makers often ask questions that are difficult to answer and that do not always fit easily within the scope of readily available models; economists are good at building elegant models that are analytically tractable, but are not necessarily relevant to the interests of the policy community. Nevertheless, we believe strongly that policy should be evidence-based.

The book does not attempt to cover all areas of housing economics and policy but concentrates particularly on those issues which are the most important to an understanding of housing affordability. Both authors recently worked together as Specialist Advisors to the House of Lords Economic Affairs Select Committee and this experience was one (of the many) influences on the work. A further influence was our research for the Barker Review of Housing Supply, published in 2004: research which is still used within the English Ministry of Housing, Communities and Local Government.

Among economists who study housing issues, there are loosely two groups; first, there are those who treat housing as a specialist subfield. For this group, the life blood of the subject includes market imperfections, spatial differences, tenure, externalities, taxation and subsidies, distribution problems and the role of institutions.