Liam Halligan picks up on the Social Market Foundation report into the lack of competition in the British economy. In which he says that:

While this is a valuable SMF report, I’d say it misses a trick – by failing to mention the residential construction industry. The housebuilding sector now has “all the characteristics of an oligopoly”, according to a 2016 House of Lords report. Prior to the 2008 financial crisis, SME builders accounted for almost 70pc of all homes built. Such firms, once they are granted planning permission, build houses relatively quickly to aid their cash flow, helping to ease our chronic housing shortage.

That share has since fallen to about 40pc, after countless SMEs were wiped out after the Lehman collapse, with over-mighty “volume” builders becoming far more dominant. These huge developers hoover up the vast majority of planning permissions and then sit on them, building out very slowly to keep house prices high in many areas, making more money overall by reaping huge margins on a smaller number of units.

Faced with scant competition, big incumbent developers are producing far too many small, shoddily built homes. The “contrived scarcity” at the heart of their business model is putting home ownership out of reach for a rising share of young families. Until such vested interest are faced down, any number of “planning reforms” (another batch was announced in the latest Queen’s speech) won’t fix our broken housing market.

We don’t agree. Housebuilding isn’t concentrated enough for that to be a viable technique. Yes, we know about oligopolistic competition and all that but you really don’t need that many market players for it to be unviable. Our analysis of why the large housebuilders are gaining a greater portion of supply would concentrate on how difficult it is to gain planning permission these days. The more bureaucracy there is then the greater the ability of those with scale - and thus armies to fight the bureaucrats - to secure those few permissions being granted.

However, let’s take it as being true. This is what is known as a market corner. Owning enough of the supply so as to change the price. As the Hunt Brothers tried to do with silver and innumerable others have tried in various markets over the centuries. The answer to a market corner always being the same - to flood the market with supply. Which is exactly what happened to the Hunts and they all went bust. As always does happen to market corners when supply can react to those artificially heightened prices.

If the major housebuilders are cornering the market in planning permissions - the claim being made - then the solution is to flood the market with planning permissions. That is, planning reforms are exactly the solution to this particular identification of the breaking of the housing market.

Issue enough planning permissions that no one can afford to own enough to control the price. There, we’re done.

At which point, some advice. This landbanking idea as the source of our housing woes. This is an idea that Polly Toynbee has been behind for at least a decade. As rational adults we do know that Polly is that necessary butt end of the compass pointing to valid economic ideas. That she believes it is proof that it is wrong. Our task is only ever to work out why this is so in this particular instance.

Here that’s pretty simple. The claim is that the capitalist speculators have a corner on the market for planning permissions. The answer to market corners is expansion of supply beyond the ability of the capitalist speculators to control. Given that planning permissions are things created at the flick of the bureaucrats’ pens this seems a simple enough thing to do with a reform to the planning system.

You know, issue more planning permissions.