The Housing Market has long been a staple of Economics A Level
examiners and a topic that teachers and students should always keep a
wary eye upon. The shortage of housing at a time of rising population
and real incomes leads to a disproportionate rise in the price of houses
and can lead to a bubble which has a significant impact on the entire
economy.
A media release from the Local Government Authority
today brings a slightly different angle on our analysis.
Planning
permission is often seen as the bottle-neck of housing development -
both because it is a slow process and because applications will often be
met by opposition from those who don't want developments in their 'own
back yard'. The LGA research suggests that planning permissions are not
the bottle-neck and have statistics to illustrate the rise in
permissions. The issue in their analysis is that developers are taking
too long to complete the building of the homes. Their research suggests
that this is because the developers do not have enough skilled workers
to speedily create the new homes. Perhaps developers are purchasing the
land after permission has been granted even thought they know they
can't actually build yet as they will get a better price for that land
then if they left the purchase for a few years?
Read more here from tutor2u
Housing market failure and government policy
