The free market answer to the malfunctioning planning system is simply to remove it, loosening regulations as much as is politically possible to make it easier for developers to build more, smaller homes and therefore bring prices down. This is ridiculously simplistic. It's derided even by right-wing thinkers: a report from the Conservative think tank the Bow Group rejects the conventional wisdom of the property lobby that planning deregulation and government subsidies for lenders and buyers will solve the affordability crisis. Report writer Daniel Valentine writes: 'The solution is not extra supply. Extra supply feeds house price inflation, by reassuring investors that house price inflation will continue. The property lobby says that price is a function of supply and that increasing supply will eventually prices. The opposite is actually the case.' Conversely, he points out that when supply fell following the financial crisis, prices fell as well. Investment markets operate differently from user markets, with investors attracted to the rising prices which exclude users. [...]