From the FT:
Sir, You only have to fly from any airport in England and look down or travel along any motorway and look around to appreciate the strength of Martin Wolf's argument (Why we must halt the land cycle, July 9)*. England would still be a green and pleasant land if many more houses were built.
Only by increasing the supply of houses can we avoid another bubble**. Giving more power to local planning authorities is certainly not the answer.***
Keith Tunstall, Bletchingley, Surrey, UK.
* So that's one letter in support. I wonder how many sackfuls of letters they received screaming blue murder?
** IMHO, this is only part of the answer - they were building new houses like topsy in Spain and Ireland and they still had house price bubbles - but an important part nonetheless.
*** It certainly is not! The Lib-Cons made a great show of 'devolving' power to local authorities, knowing full well that this is likely to reduce the number of new homes being built.
Put On Your Big Boy Pants, Maybe?
15 minutes ago
8 comments:
"they were building new houses like topsy in Spain and Ireland and they still had house price bubbles": don't overlook Australia. Nor California, Nevada, Florida.......
House prices bubbles are a reflection of pumped up demand from rent-seeking profits and the volume of credit.
Supply seems to have very little to do with controlling the price.
D, true, but I prefer looking at countries closer to home.
AC1, that's what I'm thinking, although by international standards, the UK has the smallest and possibly crappiest houses. And before we worry about new supply, we could enlist the help of our old chum LVT to ensure optimum usage of what we've already got.
So it should be kept centralized?
JH, not really, we should just change the tax system to encourage efficient use of existing land and housing first, the knock on effect being that resistance to new development is reduced as owners of existing houses will be paying a smaller share of the total bill.
But failing that, who speaks up for the interests of the Priced Out Generation? Their parents appear to be happy to shit on them, don't they? When was the last time that homeowners protested outside the Town Hall calling for MORE houses to be built so that their children or grandchildren can afford to buy?
I'm inclined to agree with AC1: it's the availability of cheap credit that's the main inflator of the house price bubble. HO'ists don't really benefit from the bubble, but banks sure do and they are in a far better position to make sure that it keeps inflated. All that the current bubble has given HOists is an illusion of being richer. What it has given the banks is a monopoly position as the sole suppliers of investment capital.
But where can they go next now the credit machine is bust, interest rates are temporarily pinned to the floor with funny money and house prices have started wobbling again?
I think HOism will die the same way the post-war consensus did.
B, yes, it is quite possible that the bankers are behind HOism. I can't imagine that banks themselves (i.e. the shareholders) gain much. But it only works because people are brainwashed into supporting it, and they genuinely do see themselves as richer (despite they are poorer, really).
SL, we'll see, won;t we? I think we're in for a Japan-style decade long slide, but HOism will never die, there has been and 18-20 year boom busts for centuries, the large landowners are far richer and more powerful than in Norman times and the bankers love every minute of it. The bankers take a ritual kicking in public, but most of them haven't lost a penny.
That's one heck of a powerful coalition - chuck in NIMBYism, a compliant press, lying politicians etc and it's not just going to go away.
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