Yesterday we looked at the factors that influenced prices – in essence – supply and demand. We saw both that demand is not a static phenomenon but can be extended, encouraged by a number of factors. We also saw that supply often creates demand – whereby developers build and then there is a process of encouraging the demand to meet the supply.
The question then is how can we influence supply and demand?
As we saw the supply of houses is not some neutral, independent variable. What you supply and where you supply it impacts on demand. Build some luxury dwellings on the Cornish coast, advertise them across the UK – well in the most affluent parts of the UK and you will sell them. The question then is why do we build luxury houses? Quite.
What we need here is reform of the planning system so that when proposals are brought forward it is possible to stop proposals that in no way meet local need. Then of course there is the issue of people buying existing properties and using for second homes or holiday lets. Again we could look at reform of the planning system so that in effect it would constitute a change of use if a property where not to be used purely for residential purposes.
There is also the issue of advertising. Should adverts for properties be freely available outside the region? Years ago of course in the pre-internet days adverts were generally local or in limited cases available in specialist papers. No longer, with the click of a mouse it is easy to see what is on offer anywhere. Does this mean that we have to put up with the current ease of access to adverts? Is there another approach? Ideas welcome!