Responding to Mark Carney's comments on the housing market, Research Director of the Adam Smith Institute, Sam Bowman, said: "Mark Carney's comments on house prices are timely and accurate: the house price boom in London, the South-East and the East Midlands is fundamentally down to a lack of housing. As a supply-side crisis, not a demand-side crisis, there is little the Bank of England can do to get house prices under control. Help to Buy is an unwise policy that is inflating demand without increasing supply, but it is thankfully probably too small to make a substantial difference to house prices overall.
"The Green Belt is one example of how legislation is pumping up prices by choking supply. Planning permission is so valuable that a piece of agricultural land that receives planning permission for construction to take place will increase in value by one hundred times. By rolling back the Green Belt by just one mile around London, we would have space for one million new homes. Only substantial planning liberalization by the government can make it easier for new houses to be built and house prices to return to sane levels."
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The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.