Housing boom a failure in policy

The managing director of Capital Economics, the economic forecasting consultancy, has described the UK’s house price boom of recent years as bringing “misery” to thousands of people and representing a “failure” of policy.

Roger Bootle cites lack of new housing as the cause of the problem and has criticised Government ministers for failing to secure more land for housing development.

He maintains that the “extraordinary” rate of house price growth seen in recent years has had damaging effects on both the UK economy and household finances.

Whilst the majority see the history of the housing market as a story of great success, Mr Bootle is suggesting that it is “one of the UK’s most unbridled failures.”

Referring to Government initiatives such as affordable housing as gimmicks, the managing director wants the availability of land for building to increase and the rate of building to move up sharply.

A senior official from the Department of Communities and Local Government has responding to Mr Bootle’s comments by acknowledging that housebuilding has to keep pace with the rising number of households being created.

The spokesperson also acknowledged the importance of delivering more land through the planning system.

Prime Minister Gordon Brown has publicly stated that closing the affordability gap for many aspiring homebuyers is a key policy government priority; he has also increased the target for new housebuilding to three million homes, by 2020.

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