The government finally decides to do something about housebuilding

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Not that the government has decided to do the right thing about housebuilding of course, that would be far too much to hope for. But they are doing something:

Ministers want to break the stranglehold on the country’s building industry, with eight developers responsible for more than half of the homes built every year. Under the plan, the Government will arrange for planning permission to be granted at five areas in England and then offer the sites to developers. The sites, which comprise 13,000 homes, will be offered in parcels of 500 homes each to smaller house builders.

We do not believe the idea that the housebuilders are trying to maximise profits by dribbling housing out onto the market at all. We think they're being entirely rational in keeping a stock of perhaps 6 years of housing plots simply because it takes 6 years to move currently unplanned land along to something that has been built upon. Just as we rather expect a coffee shop that gets weekly deliveries of beans to hold a week's stock of beans, one enjoying daily deliveries to keep only a day or so's stock. To us therefore the answer has always been blow up the planning system so as to allow more building.

But let's say that you do believe the landbanking story (although your believing it will put you in company with Polly Toynbee, not somewhere an economic rationalist ever wants to be intellectually). So, if you think there's a cartel monstrously and outrageously hoarding building sites, your response would be to create more building sites of course. Which is what is being done. But instead of creating enough for 10% or so of current new build you would instead, well, you'd blow up the planning system and make absolutely sure that there were many potential building sites, wouldn't you?

You would so expand supply that there could be absolutely no chance of cartel, monopolistic or oligopolistic behaviour. We would return to the planning system of the 1930s. Which was, actually, the last time the private building industry produced the sort of volume of new build we think the country needs and or desires. And which also, as matter of simple historical fact, dragged the country up out of those Depression doldrums.

Hmm, more housing, cheaper housing, an economic boom from the building of it all and we get to kill off a pernicious bureaucracy to boot. All sounds most wonderful: and all we have to do to achieve it is carry out that most enjoyable task of killing off that pernicious bureaucracy. As we've said around here before often enough, repeal the Town and Country Planning Act and she'll be right. And as we also like to emphasise around here, the solution to troubles that government is trying to deal with is often to stop government doing the damn fool things it is already doing, nothing else.

And to complete the trifecta, as we also like to note, it's surprising how often stopping government from doing something is the correct solution to our woes.

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