After the Prime Minister's speech in central London this morning on tackling the housing crisis Sam Dumitriu, Head of Research at the Adam Smith Institute, speaks out on Mrs May's policy priorities:
"The Campaign to Prevent Real Estate may object, but the Prime Minister is right to take-on NIMBY councils in high-demand areas. Restrictions on new development push rents up and hold back productivity by pricing workers out of the best jobs. But we must go further and build on the Green Belt.
“Building on the Green Belt doesn’t mean ugly sprawl or trashing the environment. If we only freed up intensively farmed land within a ten-minute walking distance of a train station for development, we could build one million new homes.”
“Paying executives for generating profit rather than building homes may seem perverse to Mrs May, but the alternative would create even worse incentives. In a market economy, executive pay should be determined by shareholders, not by compliance with the government’s five year plan.
“We shouldn’t blame land banking for slowing down construction. The uncertainty of the planning system incentives housebuilders to build up a pipeline of permissions. Without it, withdrawn permission could leave builders, tools and cement mixers sitting idle."
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