As the present Tory administration staggers on, one minister at least is showing some terminal creativity. The levelling up, housing and communities secretary, Michael Gove, is galvanising housing policy, sort of. This year, he has at last abandoned the absurdity that there is a national housing need of a fixed number of houses a year. Councils in England have been told they no longer need to deliver a precise target of new buildings laid down in Whitehall irrespective of sound planning or local opinion. He has also vetoed an ugly suburban development in Kent, has introduced plans that would allow local councils to limit Airbnb and holiday homes, and is trying to make manufacturing companies pay for recladding tower blocks post-Grenfell. Gove has begun to call the bluff on the daftness of the housing debate, typified by the BBC never seeming to use the word housing without adding “crisis”. There is apparently a crisis if house prices are rising as well as if they are falling. The thesis that Britain “needs” 300,000 new houses a year is a hangover of 20th-century demography, frantically kept alive by construction industry lobbyists. Need is merely a synonym for demand. The south-east “needs” an infinite number of houses because demand will always exceed supply as long as governments tilt wealth towards the capital, as Germany and France have wisely not done. The exorbitant cost of much housing in the UK has nothing to do with housebuilding. New houses make up a tiny share of any country’s housing market. Prices rise when cities prosper and when, as in recent years, interest rates are low and so money is cheap. British politicians bribing voters with mortgage subsidies merely inflates prices and thus benefits sellers. Equally, the prediction of an imminent plunge in UK prices is not the result of a surge in new building – there has been none – but a quadrupling of mortgage interest rates. This whole debate is dominated by the building lobby, which is a massive donor to the Tory party – a relationship exemplified by Lord Udny-Lister’s short-lived tenure in Boris Johnson’s office. The developers are primarily interested in luxury London towers for overseas investors, mostly empty, and in greenbelt estates in the south-east. The reality is that the housing market is overwhelmingly determined by the financial and fiscal conditions in which houses, primarily existing ones, are bought and sold. As the Oxford University geographer Danny Dorling has long pointed out, these conditions have produced among the most wasteful occupation of land and houses in Europe. Paris’s urban density is leagues above central London, and that is with virtually no residential towers. Indeed, London’s most densely populated square kilometre is also tower-free: Maida Vale. The political hysteria surrounding home ownership in Britain means, as Dorling points out, “a house stops being somewhere to live and becomes hoarded space”. It is a bank balance frozen in time and place, with little or no relation to how many people live in it.. British government policy is responsible for this gross inefficiency. Selling a house is taxed through stamp duty. Property taxes are kept low and regressive. The green retrofitting of old properties is penalised with 20% VAT. Gove is telling councils that coating fields in ugly estates from Somerset to the Isle of Thanet profits no one but builders. He wants to re-empower people to decide whether and how their communities should grow, change and appear, even if that sometimes means telling them to reject what is ugly. It is absurd that rightwing thinktanks, in tune with their anonymous donors, should insult them as nimbys for resisting Whitehall’s centralist targetry. More controversially, Gove is allowing councils in suddenly popular holiday resorts to limit the amount of properties given over to Airbnb and holiday lets. Why Cornwall, East Anglia or the Lake District should stop their local entrepreneurs from exploiting their chief asset, their beauty, might seem moot. But Gove is not, as his Tory critics complain, interfering with the free market. He wants to give local people the choice. Belgravia, Chelsea and Kensington may be happy to see their permanent populations go into freefall. But St Ives, Chipping Norton and Windermere should have the right to refuse. Every incoming government swears that it wants to reduce centralisation and boost localism. Keir Starmer has said he wants to “give back control”, albeit unspecified. Few politicians ever fulfil that pledge. British regional and tax policies have inflated housing costs and inequalities. They have punished younger buyers and rewarded older sellers. They have disempowered local people and cost the taxpayer a fortune. Gove at least is moving in the right direction. Simon Jenkins is a Guardian columnist