Policy Exchange: reform 'broken planning system' to fix housing crisis

The government must tackle the 'fundamentally broken planning system' in order to bring down property prices and tackle house price volatility, according to a report by an influential think-tank.

New homes: report calls for planning reforms to cut prices
New homes: report calls for planning reforms to cut prices

The report, Taxing Issues? Reducing housing demand or increasing housing supply, by the Policy Exchange think-tank says that the best way of bringing down the cost of rents and home ownership, and dealing with issues such as house price volatility, are changes to the planning system.

The report says land and property taxes "are seen as a way of tackling important issues such as inequality, house price volatility and falling home ownership".

But it says these issues would be solved "by genuine reform of planning to increase the supply of homes".

"Rising land and house prices are related to a fundamentally broken planning system that pushes up the value of land with planning permission ever higher. This is clear from the evidence of the past 30 years. If we do not build enough homes, house prices and rents will rise", the report says.

It recommends that politicians should commit to building 1.5 million homes between 2015 and 2020, 300,000 a year.

Policy Exchange said this should include the construction of new garden cities. "Voted through by existing local communities, new and attractively designed garden cities will act as beacons for development, creating huge housing and infrastructure projects".

Alex Morton, head of housing and planning at Policy Exchange, said: "Policy-makers should ignore calls for a new round of property taxes, and instead commit to spreading the benefits of homeownership and stabilising the UK economy by building at least 1.5 million new homes over the course of the next Parliament. This means serious reform of the planning system and creating new ways to deliver housing."

Taxing Issues? Reducing housing demand or increasing housing supply can be read here.


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