Tuesday, July 23, 2013

The fatuous “Help to Buy” scheme.

Whenever there’s a problem, governments of almost any political persuasion think the solution is a new scheme dreamed up by government and costing the taxpayer millions. Almost invariably a better solution is for government to simply piss off and stop interfering in the market.
The British government’s recent “Help to Buy” scheme to help home buyers is a nice illustration of the point. It will cost taxpayers £1.3bn. And yes, it will help people buy houses.
But as is shown in this Policy Studies work, nearly 30% of the cost of housing in Britain is accounted for by artificial constraints on house building: specifically the difficulty in getting planning permission. And that difficulty boosts the price of land on which houses can be erected.
So to repeat, government could cut the cost of housing at no cost whatever to the taxpayer if government just pissed off – or to put it more politely, if government stopped putting such severe constraints on house building.
As to conservationists who want the countryside preserved, they need to understand that there’d be little difference in the amount of countryside covered with concrete. That is, relaxing planning regulations would obviously result in more countryside being covered with concrete, but “Help to Buy” absent such relaxation simply enables house buyers to BE ABLE TO AFFORD the higher land prices that non-relaxation brings.
And just in case you hadn’t realised that conservationists are deranged, most conservationists are in favour of mass immigration. They apparently can’t work out the connection between increased population and the need for more housing, roads, factories, etc.

(H/t to Mark Wadsworth)

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