Liz Truss will face an enormous in-tray of problems when she takes over from Boris Johnson as Prime Minister tomorrow. But the biggest headache of all will be how to deliver on her Housing promises without making the housing crisis worse – and potentially tanking the economy.

Ms Truss has won the Tory leadership – and hence the keys to Number 10 – by promising Tory voters in the South East of England that they don’t need to fear “Stalinist” “top down” housing targets, which she will bin in favour of Local Councils setting their own housing targets. She’s also pledged to protect the Green Belt (having previously promised to build a million homes on it), while focusing new housing where it is least needed – away from those troublesome NIMBY voters.

The trouble is, the UK still isn’t building enough new homes to keep pace with demand, let alone sufficient to cool off the overheated housing market. We need to build at least 300,000 homes (the current Government policy) every year for the next ten years. Last year (20/21) we built 219,490 net new homes. This decline was in part due to Covid – the previous ten years had seen increases every year, peaking at 243,770 in 2019/20.

The promises made by the new PM make the problem much worse. Far from liberalizing the planning system, she plans more regulation, and a sclerotic reform that will make it much harder to deliver the new homes the country needs. Local councils routinely set housing numbers much lower than the actual need for housing, resulting in years of under-delivery and sky rocketing prices, overcrowding and suppressed household formation.

They also ignore the facts on the ground. The biggest fraud of these is the Green Belt. This is not an environmental designation, but a spatial one. Much of the Green Belt is not special; it is only protected because of the need to restrict the urban sprawl of cities. The level of protection afforded to the Green Belt is unreasonably high – even a garden shed can be banned in some places, on the grounds of openness. Allowing minor developments in the Green Belt would not irreparably harm the spatial policy purposes of the Green Belt – which has doubled in size since 1979, covering well over a million hectares.

The fastest way to improve the volume of housing delivered is not to tinker at the edges, or to go bananas (build absolutely nothing anywhere near anyone). It is to properly fund local planning authorities, so they can recruit sufficient well qualified staff (and train apprentices) to deliver a proper service. It is no coincidence that the best funded local planning authorities are also the easiest to deal with.

Until Ms Truss grasps that “build build build” is the mantra she should go for, rather than NIMBY promises of preventing England’s “green and pleasant Green Belt” from being developed, we face a worsening housing crisis – and given the impact construction has on the economy, a worse recession than is otherwise likely.