Liberalise planning rules to fix a #housing #crisis – sounds logical, but it won’t work
The government response to soaring inflation is to promise to build more #homes at speed by loosening the planning system. It is a “supply side” solution, which sounds logical: rapidly increase the number of homes being built and prices will inevitably come down. It is a highly contentious approach, which cost the Conservatives the Chesham and Amersham byelection, but it sounds as if it should work.
The problem is that the housing #market does not function like a pure market, and while the #UK does have some of the highest prices in the world the #affordability crisis is not a peculiarly British issue; it’s a global problem, with an index by the property consultants Knight Frank revealing that global residential prices have risen by more than 60% in the past 10 years.
Cities around the world, from Auckland to Vancouver, are facing an affordability crisis, with huge price rises and extreme gentrification in cities linked to global capital flows and foreign investment rather than local circumstances. This ensures that increased supply will not bring prices down; the new luxury apartment complexes that now characterise British cities such as London, Manchester, Bristol and York, to name but a few, remain out of reach for the majority of house buyers. Many are sold “off plan”, straight to foreign investors, before they have even been built.
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