Intervention and restrictive planning ruin housing market’s foundations
3 April 2023
SUGGESTED
Government and Institutions
In the Media
Matthew Lesh quoted in Conservative Home
4 April 2023
Economic Theory
Mark Littlewood writes in The Times
IEA Director General Mark Littlewood has written in The Times on how ratcheting state intervention has contributed to the housing crisis.
Mark wrote:
“The sad truth is that the housing situation is even worse than advocates of liberalised planning laws tend to admit. It is true that there is an absurd problem of politicians supporting housebuilding in general but then opposing almost any specific housebuilding programme. Compounding this, governments have taken a grim situation and layered on policy to make it even worse.
“The costs of the mandated environmental upgrade will vary by property, but typically will run to several thousand pounds. Such costs will be passed on in higher rents.
“The sad tale of housing policy in Britain has been for government intervention to undermine a market, politicians to point at the sector and say there is evidence that the market isn’t working and then to introduce proposals, usually around some form of price-fixing, that make the situation worse. For a glimpse into a possible next move, one need only look at the rent controls introduced in Scotland under Nicola Sturgeon. A plan to ensure prices stayed low has had the opposite effect. Over the past year, rents in the UK as a whole rose by a little less than 8 per cent but in Scotland by more than 12 per cent. Some estimates suggest the number of rental properties available in Edinburgh has fallen by nearly a third in under a decade.”
Read the full article here.
Mark wrote:
“The sad truth is that the housing situation is even worse than advocates of liberalised planning laws tend to admit. It is true that there is an absurd problem of politicians supporting housebuilding in general but then opposing almost any specific housebuilding programme. Compounding this, governments have taken a grim situation and layered on policy to make it even worse.
“The costs of the mandated environmental upgrade will vary by property, but typically will run to several thousand pounds. Such costs will be passed on in higher rents.
“The sad tale of housing policy in Britain has been for government intervention to undermine a market, politicians to point at the sector and say there is evidence that the market isn’t working and then to introduce proposals, usually around some form of price-fixing, that make the situation worse. For a glimpse into a possible next move, one need only look at the rent controls introduced in Scotland under Nicola Sturgeon. A plan to ensure prices stayed low has had the opposite effect. Over the past year, rents in the UK as a whole rose by a little less than 8 per cent but in Scotland by more than 12 per cent. Some estimates suggest the number of rental properties available in Edinburgh has fallen by nearly a third in under a decade.”
Read the full article here.
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