Wednesday 2 March 2016 12:01 am

UK house prices: Institute of Economic Affairs (IEA) says government failure to confront Nimbys is fuelling the housing crisis

A leading free-market think tank has accused the government of yielding to self-interested local residents at the expense of pressing ahead with major housebuilding projects.

In a new report out today, the Institute of Economic Affairs (IEA) argues that the government’s “failure to tackle the housing crisis is due to its unwillingness to confront the root cause of the problem” and organised so-called Nimbyism.

“The root cause of the UK’s housing crisis is simply down to the lack of supply, hurting Brits up and down the country,” said IEA director general Mark Littlewood. “For too long there has been an absence of political leadership manifested through an unwillingness to confront organised interest groups.

“Instead of introducing schemes such as Help-to-Buy, which have actually pushed house prices up, the government should be aiming to improve affordability by getting rid of planning restrictions that are conceptually wrong, and allowing construction levels to increase to the level that will allow house prices and rents to fall across the board,” Littlewood added.

According to the IEA report, the average house prices in Britain increased by more than 400 per cent since 1970, after taking into account inflation.

The government has promised to build more than 400,000 new homes in England by the end of this parliament, including 200,000 so-called Starter Homes to be sold to first-time home-buyers at a cut price.

In last year’s Autumn Statement, chancellor George Osborne also announced government support for 135,000 “Help-to-Buy: Shared Ownership” properties, and another 10,000 homes that will allow a tenant to save for a deposit while they rent.