QE and Concrete: Can Public Housebuilding Reboot the Economy?

26th March 2026

Lessons from the Post-War house building Boom
Between 1951 and 1964, successive UK governments pledged and delivered 300,000–400,000 new homes per year. This included New towns like Glenrothes, East Kilbride, and Cumbernauld.

Mass council housing in cities and rural areas

High public investment, often coordinated by local authorities

Direct job creation in construction, materials, transport, and planning

This was a deliberate Keynesian strategy: stimulate demand, reduce unemployment, and rebuild post-war Britain. It worked—at least temporarily.

But by the late 1950s, the Treasury and Bank of England began covertly restricting housebuilding as part of “stop-go” macroeconomic policy. They feared inflation, currency weakness, and over-reliance on credit. Mortgage availability was squeezed, and building society funds were starved.

Could QE-Funded Housebuilding Work Today?

Quantative Easing (QE) funding via Bank of England Cheap capital for public investment - Inflation if supply chains are tight

Mass housebuilding -Jobs, housing, economic stimulus Land use conflicts, planning delays

Tax returns from new activity - VAT, income tax, council tax
Lag between spend and tax recovery

Targeted regional investment
Revives fragile areas like Caithness and Sutherland Needs coordination with local authorities

The Resolution Foundation and others warn that credit-based schemes without supply reform (like Help to Buy) simply push up prices. A QE-funded build programme must be paired with:

Planning reform to unlock land

Skills investment to expand the workforce

Local authority empowerment to deliver housing where it’s needed

Rent controls or price caps to prevent speculative inflation

Would Inflation Be a Necessary Evil?
Possibly. If inflation rises due to productive investment—not speculation—it may be tolerable. The key is ensuring:

The inflation is temporary and contained

The benefits (jobs, homes, tax revenue) outweigh the costs

The Bank of England coordinates with fiscal policy, not fights it

This is where post-war lessons matter. Britain’s 1950s boom was undone by stop-go cycles, where stimulus was followed by deflation. A modern programme must be consistent, long-term, and locally grounded.

Bottom Line for Scotland
In places like Aberdeen, Caithness, and the Highlands, a public housebuilding surge could:

Create anchor employment

Stabilise fragile communities

Reduce housing stress for young families

Stimulate local economies

But it must be planned, not just funded. QE alone won’t build houses. Only coordinated public action will.