The arithmetic of Britain’s housing crisis isn’t especially challenging.

Between 1981 and 2021, three million fewer properties were built than in the preceding three decades. Combine this with a massive expansion in access to credit and an ageing population staying in their homes for longer and you have a crisis on your hands.

Understandably, pro-housing campaigners tend to focus on planning and there is a case to be made that this makes up a huge form of the problem. Indeed, a 2016 paper by Christian Hilber and Wouter Vermeulen found that the increase in house prices that occurred between 1974 and 2008 would’ve been 100% less had all regulatory constraints been removed (in the example they cite, a house would have gone from £79,000 to £147,000, rather than £226,000).

However, though planning rules are at the heart of the regulatory problems plaguing our housing market, they are not the whole story. Restrictive covenants are also a prime target for abuse.

Unless you’re lucky enough to own your own home, you probably haven’t come across this term. Put simply, a restrictive covenant is a rule about what you can’t do with your land. Originally these served the purpose of providing order to how land is used before the days of town planning, but nowadays it seems hard to justify their prevalence. The Law Commission estimated in 2008 that as many as 79% of registered freeholds were subject to at least one restrictive covenant. Whilst there is no data showing the function of each of these covenants, anecdotal evidence from practitioners suggests that the bulk of them are irrelevant to modern needs.

The extent that these restrictions have can be incredibly wide, but common examples include not being able to convert a house into flats or blocking new housing to protect existing views – both of which can stop homes being built, even if planning permission has been obtained.

Typically when contractual rules are made they have what’s called privity. Effectively, this means that the rule doesn’t affect third parties. However, restrictive covenants are unique. Since a dubious 1848 judgement relating to a covenant to keep Leicester Square (yes, that Leicester Square) free from buildings, these restrictions can last for eternity.

Thankfully, Parliament has granted some occasions where covenants may be removed. The problem is that while it may be possible in theory, the courts have tended to take a dim view of such attempts. Indeed, to combat this problem a public interest ground was added in 1969, meaning that any restrictive covenant that was deemed to be contrary to the public interest could be discharged by a special court called the Lands Tribunal.

Again, this is great in theory. Given the extent of the housing crisis, you would presume that any restrictive covenant denying the building of new homes would be overturned. Indeed, this was the exact intent of Parliament when writing the legislation. Sir Arthur Irvine, the Solicitor General at the time, even used the example of overriding a density restriction when selling the Bill to the Commons.

However, the courts have failed to apply Parliament’s intent, and the public interest ground is of little use even when it’s clear that a restrictive covenant is contrary to the public interest. For example, as recently as 2020 the Supreme Court ruled that 13 affordable homes that had obtained planning and already been built could never be inhabited, because that would breach a covenant that prevented development of open land near a children’s home. In another case, 120 new homes in Berkshire were denied being built so as to ‘protect the amenities of the National Trust’. Andrew Francis, a lawyer known as the ‘restrictive covenant King’, has even gone as far as to say that the public interest exception will ‘only succeed in rare cases’.

The problem with the 1969 change is it did not spell out when a restrictive covenant may be discharged. In the parliamentary debates at the time, the Government deliberately avoided giving examples where a restrictive covenant may be discharged, giving the courts the discretion needed to resist any new housing.

That’s a problem that is eminently solvable today. By amending the Law of Property Act 1925 to provide a presumption that covenants preventing new housing are contrary to the public interest, we can help relieve a big obstacle to fixing the housing crisis.

Remember that the express will of Parliament was that this public interest would allow more houses to go up and mitigate the damage done by archaic laws. By leaving it open to legal wrangling, however, we’ve ended up with decades of inertia and victories for the cause of Nimbyism, all of which has exacerbated the housing crisis.

So, while planning reform is essential to solving that crisis, Parliament getting to grips with the scourge of restrictive covenants would be a very welcome step in the right direction.