Home Shortage Getting Worse - Scala Land Investments Report

By: Scala Land Group

'While it's not the whole answer, meeting targets will be difficult if we continue to constrain supply unduly,'' Barker, who has advised the Treasury on the issue, told the conference. 'On housing supply, the scale of the problem is growing larger.'

House prices in the UK have tripled since 1997 and rose more than 10% last year. In a 226- page report issued last year Barker recommended to the Chancellor of the Exchequer that the government should ease building restrictions to help increase supply.

'There's a clear divide between homeowners and others,' Barker said. 'Land prices and house prices have risen to pretty uncompetitive levels. It would be understandable if it was just a London phenomenon, but it's quite widespread.'

It looks like more building will be a priority for the next prime minister. Gordon Brown stated on May 13 that he will oversee the construction of five new environmentally friendly towns as one part of a plan to supply 200,000 new homes a year. Homebuilding dropped, on average, to 148,000 new units a year between 1989 and 2005, from a peak of 425,000 in 1968, government data show.

Barker still said she is 'disappointed' about the government's plans for incentives to encourage homebuilding. 'The government has been more cautious when it comes to financial incentives,' she said. 'There's a serious risk that they'll be less powerful.''

A report title 'The Best Laid Plans' issued by the Policy Exchange research concluded that the current system makes it easy for local councils to avoid approving construction plans and proposed dramatic changes to the planning system.

One of the joint authors of the report, Dr Oliver Marc Hartwich, said. 'It's extremely unattractive

for local authorities to grant planning permissions because it costs lots of money and you run into problems with neighbours who don't want new developments in their backyards. I don't see the government getting incentives for planning permission right. They only talk about national targets.'

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