Will the coronavirus crisis force genuine reform in the housebuilding sector?

Over time output recovered, but starts were still 45,000 units below the pre-recession peak in 2018/19.

And the industry is still being supported by the government through Help to Buy. It underpins between 36% and 48% of the sales of the top five builders involved in the scheme.

Quite why the UK’s housebuilding industry, which in the 1930s could produce 250,000 units year-on-year, struggles to produce enough housing is a regularly asked question.

Policy Exchange blames the planning system for “excessively ration[ing] developable land”. The thinktank advocates a much simpler system – something that might be taken seriously given that one of the authors is now a special advisor at Number 10.

But there have been signs that government is weary of house builders blaming the planning system. The number of units with detailed planning permission every year exceed the numbers of starts – by more than a million in England alone over 2011 to 2018.

Enter Oliver Letwin, charged with uncovering why build-out rates are so slow. He cleared the house builders of the land speculation known as “landbanking” but argued that they slowed down building on large sites for fear of lowering prices.

The government has responded to some of Letwin’s calls, but is resisting his more radical proposals for capping the price paid for farmland compulsorily purchased to build homes.

A House of Lords select committee said the housebuilding industry “has all the characteristics of an oligopoly”. The UK Housing Review reckons that the largest builder now accounts for one in 10 starts in England, the top four builders for more than a third, and the top 10 for nearly half.

This affects supply because it is more profitable to sell a fixed number of properties from four sites than the same number from one – the “absorption rate”. The Lyons Housing Review, published in 2014, concluded that the imperative to acquire more sites drives many mergers and takeovers and ultimately reduces supply.

Meanwhile, small house builders play a crucial role, but their numbers have fallen. Firms producing 100 or fewer units declined from more than 12,000 in 1988 to just 1,737 in 2017.

Even before coronavirus came along, the review concludes that the current model of housebuilding is unlikely to meet needs and a different business model is required.

But what now? Coronavirus has been compared to the last financial crisis, and in some ways the government response has been similar. The Bank of England’s Monetary Policy Committee has cut interest rates slightly, but in reality had no alternative to another round of quantitative easing.

And the chancellor has adopted a “whatever it takes” fiscal loosening.

Yet never before has the state induced a recession by forcing large parts of the economy to shut down overnight. This is more brutal even than the global financial crisis.

“As with other recessions, fewer house builders are likely to emerge than went in, and the onward march of concentration will continue”

The housing market is juddering to a halt. The few house builders (such as Berkeley and Redrow) still building will surely stop, following the ban on housebuilding in Scotland and its suspension by Barratt and Taylor Wimpey. Some builders have suspended or cancelled interim dividends to protect balance sheets.

As with other recessions, fewer house builders are likely to emerge than went in, and the onward march of concentration will continue.

A key question is whether the relationship between the state and the industry will change as a result of the crisis. If the industry demands more state support, perhaps government will conclude that it is not fit for purpose, and force reform on it.

Maybe. But one of the most striking conclusions is that, more than a decade after the last crisis, little has changed in the British way of housebuilding. And until the present crisis, government action had simply strengthened the trends towards an oligopoly.

Mark Stephens, co-editor, UK Housing Review