Arrested Development: Are we building houses in the right places?

The UK’s housing problem has become an economic problem. New supply has been weak even where local economies are thriving and house prices rising are dramatically. This prevents our most successful cities from expanding, shuts people out from job opportunities and stifles national economic growth.

The problem is that too little land has been allocated for new housing, despite soaring demand. In the long housing boom from 1995 to 2008, the real price of residential land rose 260 percent, while its supply fell by 19 percent. The result was higher prices and smaller houses.

The Labour government has tried to deliver more housing through regional planning and local targets, but with only limited success. The Conservatives are right to focus on increasing local rewards, but their proposals are unlikely to make a significant difference.

Our programme for the next government is threefold:

National leadership

• Make the case for more housing land in the areas of highest demand, including on green belt where appropriate

Real local incentives for development

• Pilot land auctions in a small number of local authorities, to boost the local incentives for development
• Increase the amount of local taxation that is locally raised

Relax national constraints on land development

• Abandon the national brownfield target, the benefits of which no longer justify its costs

• Devolve responsibility for the protection of green belt