Wednesday, 01 April 2015

Report: planning reforms will not help housing

The government’s ‘timid’ planning reform will not solve the housing crisis, according to a report published today.

The Institute of Economic Affairs has said not enough is being done to reduce the extraordinarily high cost of housing in Britain. It said that housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.

The report, Abundance of land, shortage of housing, said empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs, and criticised the government’s new planning reforms for not doing enough to incentivise growth.

Only a thorough liberalisation of the planning system can address the affordability crisis, it said.

The national planning policy framework, which was published last month, aims to simplify the planning system to allow communities decide what development they want in their local area. But it came under fire from environmental campaigners who said it would lead to widespread development on the green belt.

The IEA said the government must resist vested interests lobbying against planning reform to help those struggling to afford to buy a home, and that the combination of a restrictive planning system and an over-centralised tax system should be addressed so that local residents obtain the advantages of development.

Currently, housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.

Philip Booth, editorial director at the Institute of Economic Affairs, said: ‘If the government wants cheaper housing, it needs to have the courage to change the system so that development benefits local people, who currently only face the costs. For too long, vested interests and nimbyism have dominated our planning system, tweaking it won’t change this. It’s time for fundamental reform.’

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