Academic journal article The Town Planning Review

Housing Market Models and Planning

Academic journal article The Town Planning Review

Housing Market Models and Planning

Article excerpt

This paper reviews the application of economic housing market models to planning in the UK context. It reviews the evolution of planning policy and practice in relation to new housing supply numbers, and shows how, since 2000, a new economic paradigm has contended for attention. The main economic model-based contributions are examined, including both academic studies and models actually used in the planning and policy process. A number of issues which arise in such applications are reviewed, and the paper concludes with reflections on why it is difficult to get economic perspectives to be fully accepted and utilised within a localised and politicised planning system.

Keywords: housing markets, economic models, planning, new housebuilding, affordability


This paper reviews the application of economic housing market models to planning in the UK context, with a primary focus on England. It begins with an historical review of the development of planning policies for new housing supply, charting changes in policy approaches from the 1970s to the Barker Review and beyond. The post-Barker period is a particular focus before the paper moves on to explore (in a non-technical way) the issues arising from the contributions of housing economists. It examines mainstream models that have been designed to assess the scale of the impact of the planning system on housing market outcomes, as well as providing a central input into the development of policy targets. It will draw on specific models developed for Government departments and agencies, intended to estimate housing affordability and to inform housing supply targets. The paper will exemplify the conceptual and practical challenges associated with model development and will reflect on the way in which outputs are used within the policy world

Recent history of planning for housing in the UK

Britain has had a comprehensive land-use planning system in place continuously governing all significant forms of urban development, including housing, since 1947. The essential feature of this system is that development rights are vested in the state and any specific development requires planning consent from the local authority. Planning consent is a discretionary decision by the local authority (Grant, 1992), although it must have regard to the operative development plan and to other material considerations including national planning policy guidance. Development plans are prepared periodically with a typical time-horizon of 10-20 years and these contain both numerical estimates of housing requirements and the allocation of specific sites or more general locations for development.

The key issues in practice revolve primarily around the 'numbers game' of how much new housing should be provided for in plans, so bringing into play different kinds of evidence, including demographic projections and, in recent years, economic models, although there are also important issues about the processes of approval (e.g., delay) and any obligations which may be placed on developers seeking permission.

Bramley (2007; 2010) argued that one can discern quite distinct phases of policy since the Second World War. Until the early 1970s there was broad consensus around the existence of a major housing supply shortfall and the need to promote both public and private sector housebuilding. After 1975, housing supply went offthe national policy agenda, due to a combination of perceptions that the post-war shortages had been overcome, lower demographic growth and public spending cutbacks which particularly affected public housing and general infrastructure (Holmans, 2005). This lack of policy salience persisted until the mid-2000s, when the Barker (2004) Review brought the issue back to the forefront in a context of escalating affordability problems and an apparent failure of the mainly private sector provision system to respond adequately. During the intervening period, and particularly after 1990, planning had become more preoccupied with issues of regeneration and sustainability, which in housing was interpreted to mean an even stronger emphasis on urban containment, re-use of brownfield land and intensification in terms of density (DETR, 1998; 1999; 2000; Adams and Watkins, 2002). …

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