The government’s decision to axe the collection of land price statistics threatens ministers’ ability to understand the effects of their radical housing policies, senior economists and policy analysts have warned.
Land prices are a significant component of new-build costs and the rapid housing market recovery in Britain – fired by the government-backed Help to Buy scheme – has already sparked a scramble for land, particularly in the southeast.
Urban land prices in London rose 13 per cent in the year to September, according to Savills, the estate agent. But builders such as Taylor Wimpey are reporting bidding wars even outside the southeast.
In a letter to chancellor George Osborne and business secretary Vince Cable, signatories including Kate Barker – author of a 2004 Labour-commissioned review of housing supply – warn that the decision by the Valuation Office Agency to stop collecting and publishing land price data “makes it much harder for government to understand the consequences of current policy interventions or to assess the case for future reform”.
The cancellation has come into focus with the coalition embarking on some of the most controversial housing policies in decades, offering subsidies to housebuilders and providing taxpayer-funded mortgage incentives under its Help to Buy scheme.
It also comes in spite of a rise in regulatory obligations for data transparency and disclosure in the wake of the financial crisis and a pledge by the prime minister to lead an “open data” government.
The Valuation Office Agency says it decided to cease the collection and publication of the statistics as a result of budget cuts in 2011. But the signatories argue that the cost of collecting data was small, at around £40,000 a year, and that the full impact of this decision has only recently become evident.
With sales of government land under way, they also argue that pricing figures would “help local government accurately assess the value of their own land holdings, which is likely to lead to significantly enhanced value for money for the taxpayer”.
Matt Griffith, associate fellow at the Institute for Public Policy Research, said that although other land price surveys existed, they were often either narrow in coverage or not independent of market operators. “Without knowing what is happening to land prices, we are driving blind in a market of critical importance to the economy,” he said.
He added that it would be difficult to assess the impact of recent planning reforms – including the new National Planning Policy Framework– on the viability of future housing supply.
“Government has accidentally turned the headlights off for a vital indicator to the success or failure of a large part of its economic agenda,” Mr Griffith said.
Other signatories to the letter include Paul Cheshire, professor of economic geography at the London School of Economics; Roger Harding, director of communications, policy and campaigns at Shelter; Jan Crosby, head of housing at KPMG, and Nick Pearce, director of the IPPR.
A Valuation Office Agency spokesman said: “The VOA stopped publishing the Property Market Report in 2011 due to lack of demand. We keep all information we supply under review, and continue to work with various public bodies to provide valuation advice on a bespoke basis.”
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