People are the ones to decide where to build homes and not governments, said Mark Littlewood, director general of the Institute of Economic Affairs (IEA), in a response to David Cameron’s housebuilding announcement.
Littlewood criticised the Prime Minister’s pledge to protect the green belt, saying that “artificial boundaries such as green belt restrictions” are hampering housebuilding which is resulting in higher prices and smaller new builds.
The IEA chief said:
“Constraining housebuilding through artificial boundaries such as green belt restrictions is a key reason why house prices in the UK are very high and new homes increasingly small. Yet again, instead of reforming planning for all, politicians are trying to plan where new homes should be built and micro-manage the damage caused by existing regulations which hamper private sector housebuilding. Ultimately people, not governments, need to decide where homes should be built.
“The potential gains from planning liberalisation are well documented: lower housing costs, a reduced cost of many goods and services, a better functioning labour market, and higher productivity and wages. It’s high time our politicians showed an appetite for taking on the vested interests opposed to reform.”
Research from the IEA, which is a registered educational charity and independent of all political parties, has shown there are a number of measures that could be taken to lower property prices. A liberalisation of planning rules surrounding the green belt and decentralisation of the tax system to incentivise development could cause house prices to drop by as much as 40 per cent, and could save a typical family £250 per month, the research found.
