Barker Review to probe scale of housing shortage
A joint Treasury and Deputy Prime Minister's office review of housebuilding will consider a wide range of factors affecting the supply of homes in the UK.
Economist Kate Barker of the Bank of England's monetary policy committee has confirmed the remit of her review of housing supply with plans to consult housebuilders, landlords and environmental groups.
The Barker Review consultation states: ‘We will look at how policy could better reflect the wider social costs and benefits of housing. The review will consider the nature and consequences of housing shortages in the UK and assess the causes of this behaviour, before going on to consider possible recommendations.'
It will assess the extent of the UK housing shortage; the consequences of housing market behaviour on house prices; and the causes of undersupply. It will also assess why housebuilders and developers have failed to enter the private rented housing market in greater numbers.
‘The housing market is so elastic that even if you doubled
the number of houses available people would simply trade up'
Improved housing supply is crucial to reducing the house price volatility which has undermined UK convergence with the euro zone economies (Inside Housing, 13 June).
The review could also help join-up the Office of the Deputy Prime Minister's policy of building an additional 200,000 homes in the growth areas with essential infrastructural and utility works in the region.
The ODPM select committee's report put a £20 billion price tag on the growth area's infrastructure requirements (Inside Housing, 2 May 2003).
Euan Willers, policy officer at the Royal Institution of Chartered Surveyors said: ‘There has not been joined up government [in the growth areas] with someone sat in the middle with enough power and I think this is what is new about the [Barker] review.'
He added, however, that the government would inevitably face controversy in the powers given to the Unitary Development Corporation proposed for the area (Inside
Housing, 18 April 2003).
Henry Oliver, policy officer at the Campaign for the Protection of Rural England said the review would also complement ‘demand' issues by reviewing the mortgage market.
‘Just by increasing housing supply you are not necessarily going to affect prices. Market housing output has remained consistent in the last 30 years but social housing has slumped. The Three Dragons research said that most local authorities did not know what existing [planning] powers they already had.
‘My view is that the housing market is so elastic that even if you doubled the number of houses available people would simply trade up.'