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The chancellor, always assumed to be anti-euro, was still able to launch Britain's preparations to join the currency on Monday – happy in the knowledge that it will probably never happen. Not just because of the likely failure of any referendum; but also because it is almost impossible to make our volatile and antediluvian housing market suitable for a Europe-wide interest rate policy (see financial news).

As Roger Humber predicted in ºÚ¶´ÉçÇø last week, Brown drew special attention to housing's role in the euro debate when he warned that without reforms, homeowners will face new capital gains taxes – or even (horror of horrors) a rolling tax on property values. So the chancellor is seeking longer-term, fixed-rate mortgages and the construction of thousands more homes. But evidence suggests that though he might achieve the former, he's doomed to fail with the latter.

That's not to say the market doesn't need reform. It does. When the economy suffers boom–bust cycles, it's usually the result of yo-yoing house prices. A 25% hike last year put Britain at the top of Europe's inflation league, eight points ahead of second-placed Spain. And the 25-year, variable rate mortgages favoured by UK homeowners are becoming unsustainable in times of diminishing job security. So, is the Continental system better? Not according to Professor Michael Ball, who found that fixed-rate loans did nothing to stabilise prices in Denmark or Holland.

Brown's chances of increasing the supply of new homes are even worse. Nobody disputes the need to overcome a shortfall of 50,000 a year and rising. Unfortunately, Whitehall's twin offensives – a new planning bill and the communities plan – are both in the mire. Housing minister Lord Rooker last week postponed the planning bill, designed to speed up approvals, until the next session of parliament. Rooker is confident of royal assent next year; but others warn that so much remains unresolved, 2005 is more likely – after the chancellor's next review of the five euro tests. In the meantime, housebuilders face a further year of planning limbo.

At least the planning bill will be implemented – that's more than can be said for the communities plan. John Prescott's vision of 200,000 extra homes in the South-east relies on a huge injection of infrastructure, such as the £10bn CrossRail link to Thames Gateway. But not only is CrossRail sans funding, there is no cash either for the billions-worth of other rail and road links needed to make the four target areas viable. The latest idea is a windfall tax on developer's land. Ho hum.

Even under the most rose-tinted Treasury forecast – in which the planning bill goes through in January, and the City offers to fund CrossRail tomorrow – it will take a decade to redress 23 years of imbalance between household growth and the supply of homes. And that assumes the political will exists to make the government's instruments of change work. Do politicians want to confront the nimbyism that has always balked housebuilding? The key problem is, increasing numbers of homes cuts the personal wealth of existing homeowners. And that's enough to put off any chancellor "championing" the euro – especially one who's not that keen in the first place.