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What sounds like a paradoxical experience may not be so much of a paradox after all. House prices, quality of life and economic growth are very much interlinked in Britain’s recent history, and it is not always easy to disentangle the three. However, if we want to understand why they are connected, it is necessary to subject them to an economic analysis, and that means analysing the way Britain’s built environment has been planned.

For policymakers, the lesson is clear. If they are concerned about housing boom and bust cycles, they have to quash the expectation that house prices will continue to rise. To do that, they need to examine property markets with long records of house price stability, and learn from them how to ensure that when more housing is needed, more can be built.

Wahlen werden in der Mitte gewonnen, heißt es häufig. Mindestens ebenso oft hört man die Klage, dass sich zumindest die großen Parteien immer ähnlicher geworden seien. Dass das eine mit dem anderen etwas zu tun haben könnte, liegt auf der Hand. Doch es war der Wirtschaftswissenschaft vorbehalten, für diesen intuitiv zu verstehenden Zusammenhang ein Modell geschaffen zu haben: das Medianwählertheorem.

A combination of high costs and poor quality is seldom a recipe for success – not for goods and services, and certainly not for countries. There is a danger that Britain will lose its most qualified people if they prefer a better and cheaper life abroad. It is equally likely that Britain will fail to attract highly skilled foreigners who are deterred by its reputation as an expensive and unsatisfactory place to live. Both would be equally disastrous for Britain’s economic future. And for this reason alone tackling the problem of Britain’s high cost of living is worth every effort.

New houses in Germany are cheaper than their British counterparts and on average 50 per cent larger. Given that the two countries have a similar population density, what’s going wrong in the UK?

The ‘green belt’ description has elevated imagination over reality in Britain’s planning system. To the public, the areas it refers to seem to be much needed reserves of nature in an overcrowded, concrete Britain. They are, or at least they are believed to be, the last remnants of what was once England’s green and pleasant land. To say anything against the concept of the green belt thus seems to smack of treachery. But we need some hard-headed thought about why and how we protect land from the development we need.

Britain is one of the most expensive countries on the planet and London its rip-off capital. Filling your car, eating out, staying at a hotel or just doing the weekly shopping are all more costly undertakings than in other industrialised countries around the globe – even without taking house prices into account.

Dr Oliver Marc Hartwich is Chief Economist at Policy Exchange although he’s about to emigrate for a new think tank appointment in Australia. In this Platform he explains the argument of the urban regeneration paper that he edited and that caused such a storm earlier this week.