We explore the determinants of the speed of residential development after dwelling construction starts. Using a sample of over 140,000 residential developments in England from 1996 to 2015 and employing an instrumental variable- and fixed effects-strategy, we find that positive local demand shocks reduce the construction duration in a location with average supply constraints and developer local market power. However, this reduction is less pronounced in areas (i) where local planning is more restrictive, (ii) that are more built-up, and (iii) where competition in the local development sector is lower. We provide a model that rationalises these results. Our findings imply that the slow build out rate in England is the consequence of both market and policy failures.

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15 April 2024     Paper Number CEPDP1990

Download PDF - Why delay? Understanding the construction lag, aka the build out rate

This CEP discussion paper is published under the centre's Urban programme, Neighbourhoods programme.

This publication comes under the following theme: Housing