Planning restrictions - good news?

The recent changes in planning laws by the Coalition scrapping the Regional Spatial strategy has resulted in refusal of planning permission of approximately 7,500 new homes according to research carried out by the FT.

The Coalitions approach of allowing local councils to decide on their housing numbers illustrates one of the downsides of having a relatively restrictive planning system which some critics have called a NIMBIEs charter.

Under the previous administration it was suggested that the UK was under providing the number of homes leading to a shortage of homes of 2.7m by 2031. The latest planning changes can only makes this worse.

This is only good news for landlords who believe in the laws of supply and demand. Less new homes means greater demand for existing houses pushing up prices. The Barker Review found that the long-term average increase in house prices above the rate of inflation was 2.4%.

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