The solution to Britain’s shortage of housing is one that seems blindingly obvious – build more.

However, there are factors that militate against doing this, not least the reluctance of the major housebuilders to do so.

It is not a new problem and over a decade ago a report was commissioned Chancellor Gordon Brown and Deputy Prime Minister John Prescott to consider how to solve it.

Review of Housing Supply, Delivering Stability: Securing our Future Housing Needs was written by Kate Barker, an ex-member of the Bank of England’s Monetary Policy Committee, made some very sensible recommendations.

Unfortunately, not much has changed. Doing sensible things, it appears, is not easy. History, though, tells us that it wasn’t always like this.

British housebuilding has experienced change not dissimilar to manufacturing – away from localism. The consequence of rapid industrialisation was the building of factories.

Workers who migrated to towns and cities such as Birmingham needed accommodation for them and their families. What was built and went up quickly became characterised by overcrowding and unsanitary conditions. The ‘back-to-back’ properties on Hurst Street which are owned by the National Trust may look quaint now but they would have been truly awful for occupants.

Little is known about the builders of the time who were largely very small and family-owned. Indeed, it is only in the period after the First World War, when mass housebuilding really became a major part of construction, that statistics were kept and histories of the companies involved recorded.

Urbanisation, in which people lived away from the immediate area beyond the centre of towns and cities, became commonplace as housing was built in what we now call suburbs.

Workers’ conditions and pay improved sufficiently to allow them to buy rather than rent. Prior to the war fewer than 10 per cent owned their homes in this country.

Subsidies provided by the Government, such as under the 1923 Housing Act, were a major reason for the willingness of local builders to engage in satisfying such demand for houses.

The subsidies were primarily intended to assist the working classes though many commentators point out the emerging middle classes – employed in non-manual jobs in insurance, banking and by public corporations – also benefited. Between 1924 and 1929 these subsidies resulted in 363,000 houses being built. Crucially such houses were relatively affordable. Builders who were local people knew what potential customers could afford.

The ending of the subsidy in 1929 did not stop housebuilding and by the mid-1930s construction was averaging 250,000 units per year.

Though larger companies such as Ideal, Henry Boot, Wates, Taylor Woodrow, Wimpey, Costain and Laing were involved, their overall contribution never rose above seven per cent. As was the case in manufacturing, local builders and labour was absolutely critical.

The houses built in the inter-war period involved skilled craftsmen who used traditional handtools. This was an age before powertools and though some components were factory produced, such as doors, locks and handles and taps, pretty much everything had to be put together on site from the raw materials delivered.

The precision of workmanship was testament to the system of apprenticeships that were essential to gain employment.

Houses were built in small batches and a builder would buy a plot of land, lay the road and set out a number of plots on which a combination of property types were constructed to satisfy perceived local demand.

Though they look similar, such houses, i.e. semi-detached, include subtle variations. Though there was a fairly standard ‘formula’ the builder was free to add whatever embellishments considered appropriate and which made them aesthetically pleasing in a way that more modern housing signally tends to lack.

While the late 1930s showed a slight dip in housebuilding the Second World War and the decade immediately after 1945, during which there were stringent restrictions on materials, all but stopped construction.

There was too much else to do and the only exceptions were the prefabricated houses produced in factories a few of which still remain to this day. Though housebuilding was to recommence in 1954 after the removal of building controls and achieved over 200,000 completions in the mid-1960s, the sector has altered.

Inactivity during the war forced a large number of builders out of business. In their place emerged larger companies who tended to operate on a less local and more regional basis; some of which expanded to become national names.

For such companies the emphasis was less on serving local needs and more on production and profit. Sometimes this was achieved at the cost of quality.

Though skilled labour was still important, there was a greater emphasis on using standardised components. As a consequence houses in the 1960s and 1970s tended to be lack architectural flourish and are, quite frankly, bland.

The 1973 oil crisis resulted in recession and resulted in an utterly catastrophic drop in demand for houses.

Before this, house prices had been booming and, as has been the pattern since, the bubble burst with inevitable problems for owners whose investment immediately diminished and for many builders who went bankrupt.

Skilled labour was laid off and many decided better prospects and conditions were offered by factories owned by, in the case of Birmingham, Lucas and British Leyland, companies that have undergone their own rapid decline in recent years.

When housebuilding did eventually recover in the 1980s, companies involved were even more consolidated nationally and their decision–making detached from potential customers.

Critics condemn contemporary housebuilders for obsession with stock market valuation of assets and their hoarding of ‘land-banks’ essential for future development.

Reluctance to increase supply keeps prices high in times of increasing demand and currently excludes many first-time buyers who do not posses sufficiently large deposits.

Procuring skilled labour and basic materials is now problematic and involves bringing workers from abroad and importing elements such as bricks because so many producers have disappeared.

As was the case in the interwar years when the Government intervened, there are many who believe the ongoing crisis requires it to do so again with urgency.

A good place to start would be for ministers to re-read Kate Barker’s 2004 report.

Her recommendations are as valid now as they were 10 years ago. Increasing housebuilding by the use of ‘carrots’ (subsidies) and ‘sticks’ through the use of taxes would assist in solving a crisis that is not in the nation’s long-term interest.

It would underpin economic recovery.

The next generation need intervention in housing similar to the initiatives implemented in the period after the First World War.

The continuing housing crisis should not be allowed to continue.

* Dr Steven McCabe is director of research degrees for Birmingham City Business School