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This article appears in the following Oxford Review of Economic Policy issue: HOUSING MARKETS AND THE ECONOMY [View the issue table of contents]
Planning policy, planning practice, and housing supply
* Kate Barker is the author of the Review of Housing Supply (Barker, 2003, 2004) and the Review of Land Use Planning (Barker, 2006a,b), e-mail: kate.barker4{at}btinternet.com
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Abstract |
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This paper outlines a brief history of planning policy in England as it relates to housing. It discusses briefly the issues raised by a plan-led system, and the uncertainties of household projections. Evidence on the relationship between house prices and housing supply, and on house-builders’ landbanks, suggests that planning constraints are a key factor behind the long-term upward trend in house prices (though over shorter periods other factors, such as long-term real interest rates, will be more important). It concludes that the environmental constraints on additional housing supply, albeit important, can be overstated. While there are serious adverse social consequences of the way in which the English housing market works today, it is not yet clear that the (largely welcome) policy steps taken over the past 3 years will prove sufficient to resolve this problem.
Key Words: housing supply • English planning policy • environmental constraints
1 A note on geography: the remit for the 2003 review referred to ‘UK Housing Supply’, but as planning is largely a devolved matter, much of the analysis and recommendations was in fact confined to England—and this paper will therefore often discuss England only.
2 At the time of writing in late 2007; there are proposals to set up a new social-housing investment body and an independent regulator from April 2009.
3 S106 established the basis on which local authorities, in granting planning permissions, could agree with developers the funding, or direct provision, of infrastructure or community facilities. Since 1991 the use of S106 agreements has been extended and altered on a number of occasions, and it remains under review.
4 Outlined in the Planning White Paper—HM Government (2007).
5 ONS Press Release—‘National Population Projections’, 23 October 2007.
6 Office of the Deputy Prime Minister (ODPM) and Communities and Local Government (CLG) household projection press releases, various dates.
7 Housing Statistics in the European Union 2004 (National Board of Housing, Building and Planning, Sweden, 2005) is the main source for data in this section; it should be noted that there are some doubts about comparability of the country data.
8 See, for example, Swank et al. (2002)
9 Set out in, for example, Pennington (2000)
10 For example, Nickell (2004).
11 CLG (2007) includes a proposal to ensure developers report landholdings on a consistent basis.
12 Based on the study by Eftec and Entec for ODPM in 2002. However, these values are obviously very sensitive to the discount rate used. At a 3.5 per cent discount rate, the contingent value of agricultural land was estimated at £630,000 per hectare.
13 PSA Delivery Agreement 20, ‘Increase Long-term Housing Supply and Affordability’, October 2007.
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