IN THE 1930s. 


This chapter covers the general financial conditions which existed at the beginning of the 1930s, and the activities of the building societies at the time. Political aspects of housing and any politically-motivated actions by the builders and the building societies will not form a part of this work. This thesis should not be seen as an apology for the two million small homes which were constructed during the period 1932 to 1939 by speculative builders and developers. It does not argue that the ideas of architects and town planners were incorrect, or that the views of Raymond Unwin as expressed in, say, the Tudor Walters Report of 1919 (1) were unsound; simply that a minor industrial revolution had taken place, in part due to the availability of electricity, and the houses now required by the lower-paid were different to those envisaged by the housing reformers of two decades earlier. As will be shown in chapter three, the houses built by subsidies had provided some accommodation, but mainly for the better paid members of the working classes. Many of the existing houses were Victorian and even those built in the first two decades of the century were old fashioned when compared to the houses of the 1930s. The private building of houses to rent had limited financial attractions and the majority of new industries were being located in London suburbs where there were few houses.

Even though the period between 1919 and 1939 is known to be a time of heavy unemployment it was also a time of economic growth. In 1919 and 1920 there was a short boom which collapsed by the end of 1920 but by the mid 1920s growth was resumed and continued steadily until 1929. During the whole of the 1920s the rates of growth of income, production and consumer expenditure were compatible to that of the period 1870 to 1914. Export growth was slow but productivity continued around 3 per cent per annum. There was a severe depression between 1929 and 1932 but income and expenditure rates kept up surprisingly well. These figures reflect the loss in earnings from the traditional activities of ship building, coal and cotton and the emergence of new industries in Britain.

The decline in old industries and the building of new factories was coupled with a movement from the older industrial areas in the north to the London suburbs. This created a need for housing. The homes for heroes mood of 1920 had all but disappeared by the start of the 1930s. The massive landslide in 1931 for the National Government marked the end of the power of the Labour party in Parliament, for a while, and Britain became almost a one party state for the rest of the decade. In 1931 the funding difficulties of the Treasury and the few Labour party members in Parliament combined to lessen what pressure there was on the government to implement the dramatic funding of municipal housing promised by Lloyd George in 1919. In any event subsidies for house building had proved too costly and by 1922 they had ended except for those paid towards the cost of slum clearance. Essentially, the working-classes wanted, or was obliged, to buy a home because there was a lack of rented accommodation in those areas where the new industries were situated. Such homes had to be at a price level they could afford. Only houses built to the standards of the speculative builder offered the accommodation, features and a finance package suitable for the lower paid. As will be seen in chapters five and six, the builder constructed what he thought would sell for a profit and was not dictated to by the architectural profession. The fact that there was almost no involvement from the architectural profession was inevitable, since architects were seen as an additional cost which the developer considered unnecessary. Perhaps architects and planners saw the speculative estates as places where they would not like to live, and therefore as unsuitable for others. As the Journal of the Royal Institution of British Architects was to say at the start of the building boom in 1934, 'articles in the architectural press about the need to "educate the spec builder" were missing the point; the builder built what the public wanted' (2).

This work focuses on the smallest and cheapest house which was mass produced in the 1930s. This provided for the lower-paid working classes a home of their own. As the new estates were often away from their birthplaces the new owners could retreat into these homes and discover pastimes such as gardening, home improvements and the radio. These hobbies took the place of the public house, the music hall, and the street corner, as the new estates often had very few public houses and they were away from the theatres of the larger towns. It was likely that many of the new owners were the first from their family to have owned a home, a new house. Such feelings made up for the erosion of traditional solidarity once found in kinship and living close to family members. These could be considered to be brave people who had moved away from their families to take a job in a new factory which often meant learning new skills. In addition they were committing themselves to make fixed monthly repayments for twenty years. All this at a time only five years after the world had been in severe recession and Britain had experienced hunger marches, riots and the reduction of civil servants' salaries and dole payments.

The written history of both the building societies and the builder/developers does not reveal the manner in which the larger building societies fed the egos of their general managers and of how the builders were driven by the profit motive. This thesis seeks to show how the mutual interests of the builders and the societies merged resulting in the building of large numbers of small cheap homes for the working-classes. The work of architectural historians who have dealt with the social impact of housing, such as Swenarton, Brunskill, and Muthesius has looked at the estates built by the speculative developer. This thesis seeks to look at matters through the eyes of the occupiers. These occupiers were not engaged in a class struggle nor were they making a political gesture in buying a house. They wanted somewhere to live near to where work was to be found.

This chapter will examine how the lower paid or working classes were able to buy homes in such large numbers. In addition, the reasons why more houses were built for sale, and sold, after 1933 will be examined. In a later part of the work it will be shown that the building industry was able to build something in the order of three million houses, mainly low-cost ones, in the period between the wars. The response of private enterprise was shown in the great expansion of house-building during the decade before World War II when the output of houses reached a level never attained before. The number of private enterprise houses built annually reached a peak of 275,299 in 1935, and production for the five years between 1934 and 1938 averaged 265,000 per annum and costs fell during this period. The lowest point was reached in January 1935 when tender prices for local authority three bedroomed houses averaged £293 or 7s 10p per sq.ft. Material prices were falling while the cost of living and wage rates had declined steadily since 1926. The building labour force increased from 800,000 to 1,000,000 in 1937. A significant factor was the large volume of unemployment among building operators which stood as high as 217,000 in 1932 and never fell below 100,000. This anomaly, which kept the wages of some building workers lower than might be expected, will be explained in a later chapter. Both builders and house-purchasers had the advantage of comparatively cheap money and increased facilities were available from the building societies to enable owner occupiers to buy houses with a small capital outlay. The rate of house-building almost doubled since 1920 despite the fact that the population had been increasing at only half the rate of increase prior to 1914. 'As a consequence the average number of people per house has fallen from 5.4 in 1901 to 4.0 in 1931 down to 3.5 in May 1935' (3).

Ignoring the demands made upon the government for the cost of capital projects such as roads and schools to support the new estates, the building for sale of three million houses in the 1930s would have required capital invested of around ,1.5 billion. This is assuming that three million houses were built at an average of £500 per unit, including land. The amount of ,1.5 billion was the equivalent of 75 per cent of the total assets of the British banks in 1930 (4). The amounts of capital involved were immense and necessitated the involvement of the corporate sector, the banks and builders, and the private resources of the lower-paid and modestly paid sections of the community who were the main purchasers of these houses.

The building societies, in the main, provided the purchasers with funds to acquire the new houses. The banks, and to a limited extent the stock market, gave builders capital to build the houses. The government's policy of cheap money did not by itself create the boom but allowed the other participants to play their part in the economic recovery.

The adoption by the government of a policy of cheap money in 1932 had an effect on the building industry. There was very little demand from the traditional exporting industries for capital whilst building construction and the industries which served it were one of the few industrial sectors which showed any signs of having a limited recovery throughout the 1930s. The letter after page 37 from Barclays Bank dated 31 January 1936 show that 20 per cent of the Banks borrowing was to the speculative, house building industry. The cheap money policy was useful in aiding the recovery of the industries which not only provided the materials for the houses but the jobs for the purchasers. It also gave an incentive to the banks to provide capital to the developers and assisted in the appetite of investors on the stock market to support the flotation of stocks in house building/development companies. Wimpey, Taylor Woodrow, Costain and New Ideal Homesteads all went public during the 1930s (5). The rate of growth of these builders was rapid, Taylor Woodrow started house building in 1930, using borrowed money, by 1935 they were brought to the Stock Market with annual profits of £75,000 (6).

The developers/builders were encouraged to buy land outside the cities, as the Depression had further reduced already low agricultural land values. There was a surplus capacity in the building materials' industry and a good supply of labour. Trade union activities were diminishing within the labour market and the competition among the labour force was an additional factor that lowered building costs. At the same time a new style of builder/developer appeared who was willing to risk his and the banks' money to build small, cheaply constructed houses. The expectation and hope was that they could be sold at a low price to make it possible, with the help of improvements in the financing arrangements, for the lower paid to acquire them.

There was an insufficient supply of rented accommodation; at the time local authorities were not building homes in sufficient quantities to satisfy the established demand for rented accommodation. In the twenty years before 1939, 3,998,000 new homes were built, 1,112,000 by local authorities and 2,886,000 by private enterprise. A start had been made on clearing slums, in 1939 it was estimated that 245,000 slum houses had been demolished or closed and only 255,000 new houses or flats built as replacements (7) The lack of rented accommodation in the private sector and the effect of subsidies on houses built by local authorities will be discussed in the following chapter. 

(1) Committee appointed to Consider Questions of Building Construction in Connection with the Provision of Dwellings for the Working Classes in England and Wales, and Scotland and Report upon Methods of Securing Economy and Despatch in the Provision of Such Dwellings,(1918).The Tudor Walter Report , Cd 9191.

(2) Journal of the Royal Institution of British Architects, 24 February 1934, p. 388. 

(3) HMSO,About Housing (London, 1939), 2279 d.13

(4) B. Mitchell and P. Deane, Abstract of British Historical Statistics (Cambridge, 1962), p. 448.

(5) Wimpey became a quoted company in 1934, and Taylor Woodrow, Costain and New Ideal Homes floated in 1935.

(6) From the Taylor Woodrow Ltd floatation documents.

(7) Marian Bowley,Housing and the State, 1919-1944(London,1945),pp.152 and 153.