Land-Use Planning and the Housing Market in Britain: The Impact on Housebuilding and House Prices

Abstract

The impact of the British style of land-use planning upon the outcomes of private housing development and the housing market is examined. A unique cross-sectional database is constructed, and the medium-term elasticity of new housebuilding supply is estimated as a locally variable function of prices, costs, and land supply, with an explicit planning function. The model developed enables quantified projections to be made of the effect of specified changes in planning policy. The policy changes examined include large-scale increases in the volume of land released, changes in the mix of land released, and the use of planning agreements to pay for infrastructure or social housing.