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More closely link housing provision to house prices

Comment 3rd July 2010

Financially penalise, to such an extent that no authority could afford not to comply,  local authorities where house price to income ratios exceed 4:1, respectively, by 2016.

Why does this matter?

The Town and Country Planning Legislation is the most draconian legislation in the country and is fundamentally socialist in nature. Problematically in the UK Town Planners have not attempted to work with or manipulate the market but have sought instead to ignore and replace it.

In failing to respond to house price movements substantially less land than has been required for housing has been brought forward since 1947. It is scandalous that we presently construct less homes than in the 1930's and the restrictions of the planning system are solely responsible for this.

The only way for local authorities to provide enough housing is to respond to rising prices and under this proposal local authorities would have to deliver substantial amounts of new housing. Local authorities will not do this by themselves as existing residents will not vote for new housing and consequently local politicians will oppose it.

Rises in house prices prevent key workers being provided in the right areas and make the UK internationally uncompetitive. and encourage future housing bubbhles. A house price to income ratio of no greater than 4:1 needs to be achieved to stop these problems spiralling out of control.

The proposed measure is by no means perfect and over time the existing planning system needs to be replaced by a far more libertarian system capable of delivery, However existing monitoring of land supply does not work as local authorities are free to make ludicrous assumptions: Unbelievably, many local authorities can state, at present, they have delivered all the housing they are required to by their targets even when in the real world thousands are unable to purchase a house!

This proposal is realistic and achievable and it would place the price mechanism at the core of housing supply provision. This is the only way to tackle to UK's long term underprovision of housing.

This measure would act as the stick to the carrot for new housing to be created (delivered by the Governments promise to match council tax funding and allowing developers to pay off objectors, as proposed in the pre election conservative planning paper).

Importantly the proposed measure would cost nothing and put an end to irrlevant housing targets being produced.

This is the first of many radicals steps required to be taken to the UK's lamentable approach to housing supply, which needs to incorporate liberal economic principles.

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