Government
The UK government has a number of levers on the housing market:
- It controls the terms of the Bank of England's mandate and the composition of the Monetary Policy Committee
- Tax policy can be manipulated to favour home ownership
- Planning can be restricted to artificially lower the supply of housing. However, the role of planners and developer can be blurred; developers can artificially lower the supply of housing by accumulating land with planning permission to form a 'land bank' to be used as a balance book asset, which can be used as a deposit against a loan for developments elsewhere and can be sold at a later stage. Land banks can be structured to block rival developers from an area and to avoid an oversupply of housing to support higher prices.
- Rent controls can have a big effect on the housing market
See also:-