Housing Market Adjustment and Land-Supply Constraints

Abstract

Significant differences exist between national, regional, and local housing markets in the extent to which land is available for new housing development and in the planning regime which regulates the supply of land. The author examines the impact of different levels and forms of planning restraint on the process of market adjustment, including effects on house and land prices, on quantity of new housing supplied, and on density and related characteristics. The emphasis is on modelling the process of response in the medium term in a way which illuminates the interaction with demographic processes of household formation and migration. Use is made of a simulation model developed on the basis of cross-sectional data for local areas in England.