Why We Must Advocate for a Market-Based Approach in Addressing the Housing Crisis


In an effort to increase housing construction, the Government initiated a planning revolution nearly two years ago. The focus was on implementing a zonal regime similar to those in many European countries, taking a back-to-first-principles approach. However, this policy did not resonate well with Tory voters residing in areas where forced development was a possibility. The Lib Dems seized the Chesham and Amersham seat in a by-election due to concerns over planning reforms and HS2. Taking note of the backlash, the proposals were abandoned.

The new Levelling Up and Regeneration Bill, which originated from the recent Queen’s Speech, introduces more practical reforms. Rather than imposing decisions on local areas, the bill gives them a direct say in the matter and introduces design codes to ensure that proposed developments are appropriate. This represents a significant dilution of the original plans, and for good reason. Levelling Up Minister Michael Gove aptly stated that people should be partners in housing development, rather than having decisions imposed upon them.

However, these changes also mean that the Government is likely to miss its target of constructing 300,000 new homes per year. This target was motivated by the challenges young people, particularly in London and the South East, face in entering the housing market. To address this, the Government must create a more favorable market environment. For example, granting a reduction or exemption from stamp duty for older individuals looking to “downsize” would be more effective in promoting movement and encouraging construction than a host of planning reforms.

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