[Re: Liberalise planning and housebuilding can revive growth, Friday]
I wouldn’t normally say that we should ignore public opinion and do what an economist says, but Nick Crafts makes the case for liberalising planning policy deftly. In truth, even prosperous home owners have an incentive to see prices fall relative to wages. First, their children need to find a home. That an astonishing 85 per cent of new homes sold for less than £45,000 in today’s money in the 1930s should remind us all the horrendous situation young people are now in. Secondly, few of us feel we have enough room, especially in London. If prices dropped, we’d at least have the option of moving up the ladder.
Liberalisation of planning is not a thinly veiled argument by developers to make money on the back of environmental damage. Regulation drives up house prices, disproportionately hitting the lowest earners. For those households earning in the bottom ten per cent, housing costs have risen from 20 per cent of disposable income in the 1960s and 1970s to 29 per cent in the 1990s and 2000s. New development would see the supply go up, houses would become more affordable, council tax revenues would increase, and poverty levels would drop. In any case, those concerned about the loss of countryside probably overestimate how much we’ve used already – just ten per cent of England has been built upon.
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