Letwin Review – Don’t let increased supply drive down prices – err thats the point of a competative market

Letwin review to be released Monday, seemingly backing away from radical and financial measures to reduce delays through land speculation.

Guardian

Letwin says developers could increase the choice of design, size and tenure of new homes without impacting on the local market and therefore speed up the rate at which houses are built and sold.

This might be true but it only fixes on price – as economists always say never reason from a price.  Building smaller cheaper houses might not affect prices in that market segment but it does hot marginal revenue and returns.  So developers wont do it willingly.  If they were forced too they would reduce supply to maintain revenue – counterproductive.

One thought on “Letwin Review – Don’t let increased supply drive down prices – err thats the point of a competative market

  1. How do those homes of ‘varied design’ get past planners???? It’s planning policy, street scene etc that largely dictate the homes developers build…
    Letwin words are once again worthless. This government won’t be building homes this century, that is for sure.

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