The Political Economy Review 2017

conjunction with policies, such as providing rent subsidies for low-income groups, more funds for the Help-to- Buy schemes or one-off cash grants for first time buyers, the best alternative that could feasibly work better on its own is providing more public housing in the South. An existing policy, section 106, has been previously successful in providing more affordable housing by requiring new housing developments to provide a pre- determined proportion of affordable housing. In theory, by providing more public housing in the South, the supply curve of housing shifts outwards, increasing the equilibrium quantity of housing and decreasing the equilibrium price of housing, making housing more affordable in the South. As a result, whilst the price gap between the North and the South narrows, at the same time, the government has already been making policies to develop the economy in the North in recent years, such as building Kingsway and Crown business parks in Rochdale and devolving more power to the North. Consequently, this could stimulate the overall economic growth in the North through moving the general demand away from the South and make housing more affordable in the South, in achieving the ultimate aim of narrowing down the North-South divide. It is favorable to develop the economy in parts other than the South of England, to stimulate the housing demand and overall economy in the North by subsidising job creations. Nevertheless, subsidising job creation is not the best way to ensure affordable housing and a strong economy across the UK, given that empirical data and compelling theories do not support the policy well enough. Perhaps the government should consider alternatives that could work better such as narrowing down the North-South divide, ensure affordable housing, as well as a strong and inclusive economy across the UK.


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