BRITAIN’S housing market is bubbling over. Over the past five years residential property prices have risen by 30%, making the average homeowner feel around £65,000 ($100,000) better off. The frothy prices are in part down to a lack of supply relative to growing demand. Population growth has sped up since the 1980s, and there are more single-person households, but house construction has not kept up (see chart at foot of story). Housebuilding has been far slower than that recommended by Kate Barker, an economist, in an official review of housing in 2004.

On July 10th George Osborne, the chancellor, announced a plan that he hopes will get Britain building again. The proposal has two main strands. One is introducing a new “zonal system” to the planning process. The government has already committed to setting up a statutory register of brownfield land suitable for housing in England. It now promises to go further by legislating to grant automatic planning permission on those sites.

The second strand aims to make it easier for the government to force through planning proposals that get bogged down in bureaucracy or controversy. The central government will get the right to override local councils that are slow to grant planning permission. For instance, the big cheeses from Whitehall will step in and draft local plans when local authorities fail to produce them. Councils that make less than 50% of planning decisions on time will face penalties. And there will be reform of compulsory-purchase laws (known as “eminent domain” laws in other countries). There is not yet much detail on the latter idea: the reform will be introduced through legislation later in the parliament, probably in the autumn.

Among a rag-bag of other proposals, infrastructure projects with elements of housing in them will be zoomed through the “nationally-significant infrastructure regime”, a fast-tracking process introduced in 2008. Planning rules in the capital, where the housing shortage is particularly severe, will be relaxed to allow Londoners to add extra storeys to their homes more easily.

Whether these measures will be enough to tackle Britain's desperate housing shortage remains to be seen. (One newspaper this morning amusingly describes the plan as the biggest shake-up to the planning system for “nearly half a decade”.) But Mr Osborne sees broad benefits to increasing the housing stock. Productivity (GDP per hour worked) is lower now than in 2007, and flatlining. Britain’s productivity stall is particularly serious relative to other rich countries. American workers’ output per hour is 9% higher than in 2007; even in France it has increased by more than 2%. More housing, Mr Osborne says, will boost productivity. Workers will be able to move between jobs more easily (meaning that they end up in the job that suits them best) and firms will be able to set up shop in the place that is right for them.

In our leader earlier this week we argued that the politics of Mr Osborne’s summer budget were nifty, but the economics were rather dodgy. Today's announcement could be something like the opposite. If the proposals have the effect of increasing the housing supply, it will give the economy a terrific boost. But it could also lead to political strife. On the one hand, the plan looks as though it will give central government more clout. On the other, the government promises to deliver “more devolved planning powers”. Reconciling these will be difficult.