It really is the planning system that's harming us


It really is the 1947 Town and Country Planning Act that is causing our housing problems:

Britons live in the smallest homes in Western Europe because of draconian planning laws restricting house building, a report found yesterday.

Residential floor space in Britain is on average just 66 square metres (710 square feet) per household, compared to a spacious 118 square metres (1,270 sq ft) in Ireland, 115 square metres (1,238 sq ft) in Denmark or 110 square metres (1,184 sq ft) in Italy, according to data compiled by the Institute of Economic Affairs.

‘All the evidence suggests that years of tight planning controls restricting house building has led to us having the smallest space per household in Western Europe.’ The figures were compiled as part of a report which confronted some of the most widely-held views about the cost of living crisis.

We have some of the most expensive housing in Europe and some of the smallest. Those two logically go together of course: people tend to consume less of something the more expensive it becomes. But is it actually desirable?

If we were facing a shortage of land upon which to build then perhaps so. If something does have to be rationed then rationing by price is the way to do it. But there isn't any shortage of land. Housing takes up some 3% of England all urban areas no more than 10%. Famously, more of Surrey has golf courses than housing on it. What we do have though is a shortage of the pieces of paper that allow building a house on a piece of land.

Many say that this is a problem that government should solve. Build more council houses for example, force the private sector to do so. And the aim is correct, the government should solve this problem. But not by actually doing anything of course. That shortage of planning permissions is an active action by government: and the solution is therefore for them not to try to do something but to stop doing something.

Simply liberalise that planning system. After all, the last time the private sector built houses in the sort of volumes we need today was the 1930s. And it built all those houses where people wanted to live, in sizes they desired: those semi-urban semis are exactly what people find desirable today as well, judging by their prices. And all of this was done without much restriction on what could be built where.

We know this solution works because the last time we had a reasonably functional housing market was when we had an absence of that planning.