Can we fix it?

WITH Britain’s property market fizzing, the obvious cure for bubbly prices is to ramp up housebuilding. The Conservative government wants to get the country building 200,000-250,000 homes a year, up from the current rate of about 140,000. Reaching that target is seen by many—including the Labour Party, which had an almost identical aspiration when last in government—as the acid test for any government’s housing policy. A bill approved by the House of Commons on January 12th contains a number of measures to boost construction.

The idea that Britain needs to build 250,000 houses a year comes from an official review of housing supply carried out in 2004. It reckoned that such a level of private building was consistent with “real” (ie, inflation-adjusted) house-price increases of 1% a year. To get Britain up to the magic number of 250,000, the government will loosen planning rules and offer subsidies to boost the construction of “starter homes”, properties costing up to £250,000 ($360,000), or £450,000 in London. The bill also grants central government more power to bulldoze opposition to housing projects from sluggish or NIMBYish local councils.