The government's drive to lower the cost of housing by building more homes will not work, according to the Campaign to Protect Rural England.
Research carried out for the pressure group by independent consultancy Europe Economics found that undersupply – an issue being studied for the Treasury by Kate Barker – was not as much of a problem as affordability.

Rising salaries, low interest rates and the way mortgages are sold keep house prices high, it found.

Dr Andrew Lilico, economist at Europe Economics and the report's author, said: "I kept expecting to find housing undersupply when I started this report, but there's just no evidence of it. We have a system that is working adequately at the moment to provide houses. Where we have a real problem is with affordability – and the government needs to do more there – but this is not down to undersupply."

Countries such as the USA and Australia have experienced similar house price rises without any restrictions on land or house supply, the report said.

I kept expecting to find undersupply, but there’s just no evidence of it

Andrew Lilico, report author

It also said new houses make up just 1% of the stock, so cannot have any significant impact on prices. And it accused the government of not taking on board the implications of the 2001 census, which found there were 900,000 fewer people in England than previously thought.

But a spokesman for the House Builders Federation said: "The CPRE's analysis falls flat.

Source

Housing Today