If you don't believe us will you believe Paul Krugman?


We've been repeating ourselves recently in shouting that the entire house price nonsense is simply a result of the restrictions on who may build what and where. The answer being to loosen or abolish those restrictions and the problems will go away. We have also been told that we're just thinking too simplistically. So, instead, how about President Obama's Chair of the Council of Economic Advisers and the Nobel Laureate Paul Krugman?

And this is part of a broader national story. As Jason Furman, the chairman of the White House Council of Economic Advisers, recently pointed out, national housing prices have risen much faster than construction costs since the 1990s, and land-use restrictions are the most likely culprit. Yes, this is an issue on which you don’t have to be a conservative to believe that we have too much regulation.

Here in the UK housing prices have been rising much faster than building costs. We've got the same problem with the same cause: land-use restrictions.

The answer is, as we've been saying and as is said there, relax or abolish those land-use restrictions.

Abolish the Town and Country Planning Act 1947 and successors.