For several years the
The advantages of Increasing the Supply of Houses.
1. Demand is Greater than Supply.
The number of households in the
Increasing numbers of immigrants (esp. from eastern Europe)
More people living alone; e.g. higher divorce rates, people living longer. However the number of new houses being built is less than 165,000 per year which is one of the lowest figures since 1924 
2. House Price Volatility.
Shortage of Housing makes the housing market more volatile. Because supply cannot respond to changes in demand it means that even a small change in demand causes a proportionally bigger change in price. This is one reason for the rapid increase in house prices in the
3. Shortage of Key Public Sector workers.
The shortage of housing is more acute in some areas rather than others. It means that in areas of the South East, especially
Problems of Increasing House Supply
- The Current Planning procedure is notoriously long. A lot of power rests in the hands of local authorities who are able to delay and block housing proposals.
- Shortage of Land. In many areas of the country, especially the south East, it is difficult to build new housing without encroaching on green belt land. Thus there is a trade off between economic forces and also environmental forces. To some extent this could be overcome by making better use of brown-belt land.
- Time Delays. Because of the problems in planning and building. New housing policies designed now will not have an effect for several years. It is possible that 5 years down the line demand for housing will not be increasing so much.