COMMENT: The housing affordability crisis is caused by planning rules and taxes

October 23, 2012 6:49 PM

An abridged version of my letter to the Evening Standard in response to their leading editorial on the housing affordability crisis was published today. The full version is copied below:



How can two articles and a leader on the housing affordability crisis and the fact that housing supply isn’t nearly keeping up with demand not once mention what’s stopping entrepreneurial homeowners and developers from creating enough housing supply: our highly restrictive planning rules? When property owners aren’t allowed to build another story on top, a large extension at the back or new developments entirely in the green belts or in large gardens, it should surprise nobody that the only options left, basement excavations and a few developments in selected regeneration areas that still manage to make financial sense despite onerous taxes like so-called “section 106” payments, just aren’t meeting the enormous demand from London’s booming population.



There’s only one thing that can possibly happen when planning rules mean there aren’t enough homes in London to go round: the price of homes will rise until enough people are priced out and the numbers of buyers and renters in the market matches the number of available homes.


Rory Meakin, TaxPayers' Alliance


 

 
An abridged version of my letter to the Evening Standard in response to their leading editorial on the housing affordability crisis was published today. The full version is copied below:



How can two articles and a leader on the housing affordability crisis and the fact that housing supply isn’t nearly keeping up with demand not once mention what’s stopping entrepreneurial homeowners and developers from creating enough housing supply: our highly restrictive planning rules? When property owners aren’t allowed to build another story on top, a large extension at the back or new developments entirely in the green belts or in large gardens, it should surprise nobody that the only options left, basement excavations and a few developments in selected regeneration areas that still manage to make financial sense despite onerous taxes like so-called “section 106” payments, just aren’t meeting the enormous demand from London’s booming population.



There’s only one thing that can possibly happen when planning rules mean there aren’t enough homes in London to go round: the price of homes will rise until enough people are priced out and the numbers of buyers and renters in the market matches the number of available homes.


Rory Meakin, TaxPayers' Alliance


 

 

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