It's somehow unsurprising that as rents and house prices go higher, the actual space being sold gets smaller. The enormously lucrative, utterly rigged trap that is housing in the UK is good at providing depressing statistics, and the latest of them comes with a report from insurers LV=, which claims that the average home has shrunk by 2 sq m in the last 10 years alone. The average family home is now 96.8 sq m rather than 98.8 sq m a decade ago, or 153 sq m in the 1920s. Attics and garages are converted into living space, often as the result of the emergency re-use of space, brought about by factors such as people in their 20s coming back to live with their parents or overcrowding in shared accommodation. What is equally alarming is just how small the new houses and flats that have been built actually are. The upshot of 30 years of neoliberalism in housing is an exceptionally cramped product sold (or let) for an extremely large quantity of money.

How much space should we be expected to live in? Some institutions – the Homes and Communities Agency, the Greater London authority – have talked about resurrecting minimum space standards, which, like rent control, is entirely normal in the rest of Europe. The idea of space as the measure runs counter to the way things are done over here, we're reminded. In Germany, flats are advertised according to how many square metres they have, while in the UK, it is usually the amount of rooms. The fixation on the house helps with the sleight of hand – the average detached house on a new executive estate may actually be considerably smaller than the average new flat in Paris or Berlin, but the appeal to status and individuality apparently has the edge.

It was not always thus. The standards that are usually talked about are "Parker Morris", named after the chair of the committee behind a report in 1961 called Homes for Today and Tomorrow, which laid down a minimum which was compulsory in public – if not private – housing. The report said that it was better to build flats that are too large, rather than too small: "Additional space is an important long-term investment, for if a house or flat is large enough it can usually be brought up-to-date as it gets older, but if there is not enough space improvements can be impossible, or at least unduly expensive."

The committee was not so interested in layouts, but in space as an end in itself, noting that "this report is not about rooms so much as about the activities that people want to pursue in their homes", the various new forms of leisure caused by what they called the "new affluence". The report was actually criticised at the time for setting the bar too low – earlier council estates, like Spa Green in London or Park Hill in Sheffield, already exceeded the Parker Morris standards, and both the HCA and the GLA recommended Parker Morris levels "plus 10%" as a minimum. That would entail around 106 sq m for a family home, which is higher than the current average.

But using the marvellous language of regeneration, you can always sell parsimony as cool; see the branding of tiny new flats in boom-era Manchester or Leeds as "compact" or even "minimal". The latter term recalls the 1920s movement for the "minimum dwelling", like Parker Morris an attempt to define what could be expected as a decent amount of space and making it compulsory – it's ironic to see it redefined as "small". Alternatively, you can redefine spaciousness as someone getting more than they deserve, as per the repugnant bedroom tax.

The reduction of space inside goes along with the same outside. The average council estate was built with abundant public space, usually later slated for being insufficiently "defensible", for being too open and presumably too optimistic about human nature; the "regeneration" of places like the Pepys Estate in Deptford entailed building on these spaces, filling them as much as possible with something lettable. What has been lost in all of this is the idea that space is a right, a good in and of itself.