The Flaws In The Current System
The UK housing policy is affected by three key constraints; firstly, the UK housing policy operates on a development control system innately driven to contain development. Compared to a rule-based zoning system used throughout most of the world- the UK system demands that any change or alteration of any piece of land require development control permission approved at the local level. This is further weakened by Section 106 agreements that require thorough negotiations between local authorities and architects.The second constraint- inadequate revenue at the local level to empower residential development. Little revenue is allocated to the local authorities, which is worsened by the equalization system. In other words, few benefits are derived by local authorities from permitting development, yet they bear the burden that comes with local congestion.The third constraint of the UK planning system is that since the Town and Country Planning Act of 1947, residential development has continuously been prohibited ‘in all directions.’What Solutions Are In The Works To Combat The Thriving Crisis And Their Result?
Help to Buy Scheme
The government in the past years has initiated various Help to Buy schemes (HtB) to stimulate housing demand, and they aim to generate new housing supply to tackle the demand. The scheme goals have not been met as housing prices have been on the rise by 25.8 per cent between 2013 and 2014 following the initiation of the first HtB. The supply of residential buildings has failed, and ownership attainment continues to depreciate. The HtB system created a system in which the government takes much of the risk related to guarantee schemes while the remaining risk is leveraged on the homebuyers.Tight Local Planning Constraints
As prostrated in the Barker Review (2003) demonstrates housing supply shows no response to the shift in demand. The increase in earnings and population with no construction to fit in will result in hiking house prices. According to a study published in the Economic Journal by Wouter Vermeulen, observed the impact of three types of local constraints on house prices;The first was based on planning-induced constraints, the second on the scarcity of developed land, and the third on topographical constraints. This result indicated that between 1974 and 2008 that house prices could have decreased roughly by 100 percent if this constraint was fully relaxed. The topographic constraints only mattered in a statistical sense.Lastly, the effect of house prices caused by the scarcity of developed areas. This constraint was mainly restricted to greatly urbanized areas and the GLA due to its economic importance in this region. Tight planning constraints boost house prices and conjunction with business cycles; they also amplify repaid change in prices, thus generating risk for the system. Besides, suitable places like the GLA, Cambridge, or Oxford exist with more strict regulatory constraints, resulting in houses built in the wrong locations or built-in less productive regions.Benefits And Costs Analysis
Planning impacts both benefits and costs. There are substantial likely benefits in amending market flaws such as monopoly power, drawbacks, and inadequate provision of public goods. The UK planning system mostly prevents, preserves, and protects even if no actual market failure exists, not considering the cost that may overshadow the benefits. Even with this, the crisis remains.Conclusion
The UK planning Process holds an equal hand of crisis and advantages. Sadly, the rising crisis is outweighing the advantages of the planning process. Although solutions are not proving very effective, one must understand that this situation cannot be solved in one go. It took 45 years to get to this crisis level; it might take a lot more to solve fully.About Muse
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