(Bloomberg Gadfly) -- British Prime Minister Theresa May is breaking with one of her predecessor Margaret Thatcher's signature policies: getting local authorities out of the housing market.
Instead, she's pledged an additional 2 billion pounds ($2.7 billion) to encourage councils to build more homes that can be rented at below-market rates. These charts show why she had little choice but to revive the council house.
House prices have soared amid an explosion in the amount of mortgage credit available to fund purchases and a shortage of new homes.
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While that rise has been great for homeowners, the government is under growing pressure from younger voters who can't afford a place to rent, let alone get on the housing ladder. That generation's discontent contributed to May losing her majority in this year's election.
As recently as the early 1980s, councils accounted for about 40 percent of all new homes in England. In the post-Thatcher era, that figure has sunk to less than 1 percent.
Private companies haven't been able to fill the gap left by councils: the number of new homes completed each year is still less than when Thatcher came to power.
That hasn't stopped the building companies themselves from doing very well, something Gadfly's Chris Bryant has noted. May's comment that it's now up to developers to "do their duty" should be read as a shot across the industry's bows.
Skeptics may call May's move a cynical ploy to court voters. Building more council homes won't address Britain's restrictive zoning rules. It will take more time -- and in all likelihood more money -- to address Britain's housing crunch.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Elaine He is Bloomberg Gadfly's data visualization columnist in Europe, focusing on business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net.
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