OECD On Housing

Readers may have noticed that another regular topic of mine is the growing housing problem in the UK. I am not going to go into another 'rant' on this now, but simply wanted to convey my thanks to Stephanie Flanders of the BBC, a very insightful reporter, for her comments on this subject, and her blog today which highlighted the following comments from the OECD on the issue.

But the report reserves its sharpest language for the state of the UK housing market - and the planning regime. Here the OECD is preaching to the converted, at least at the Treasury. The rest of the government might have more doubts. Here's the summary:

Current land use planning policy is excessively restrictive, making supply unresponsive to demand and contributing to creating housing shortages and reducing affordability.... A reform to replace top-down building targets with incentives for local communities to allow development is underway, but the outcomes are somewhat uncertain. Housing taxation is regressive and encourages excessive demand for housing. More effective taxation could help contain demand and stabilise the housing market.

I hope to discuss in a later blog how the government might seek to match the simple economic need for more houses and a freer panning regime with the very difficult local politics. As I suggested in my bulletin piece last night , business groups are excited by the prospect of root and branch reform in this area, but can't help being alarmed by the uncertainty that comes with it. They also want reassurance that the "localism" agenda isn't about to make the planning system even worse than it is now. That is one of many questions that Mr Osborne will need to answer next week.

Please refer to my previous posts on Nimby's and their harm for my thoughts on this subject.

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