From The Daily Mail:
Doom-mongers who are predicting a 'double dip' in house prices have got it wrong, experts said today. The Centre For Economics And Business Research (CEBR) said prices will increase 4 per cent this year and continue rising until 2014, mainly due to a shortage of homes in the UK and low interest rates...
It's Blue Socialism writ large, isn't it?
Q: Who restricts the supply of (new) homes and ensures that owners of vacant or derelict sites are not encouraged to develop them?
A: The government (acting under pressure from local NIMBYs).
Q: Who is rigging the banking system so that interest rates stay low?
A: The government (acting under pressure from 'hard pressed homeowners').
Q: Does this increase the rewards for risk-taking, effort and enterprise, or does this merely reward the largest group of vested interests?
A: The latter.
Q: Does any of this have anything to do with small government, free market liberalism?
A: Nope.
Sunday, 1 August 2010
Blue Socialism
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4 comments:
In their defense though, it is utterly wishful poppycock which would have cheered up miserable jumbo mortgagees no end this morning.
I would n't be to sure its the government restricting the supply of new houses: with the price of land coming down the developers should have loads of cheap houses on the market.Except this would bring the average price down and once they start falling people would hang on to see if prices fall farther in a deflationary spiral.The developers would rather sell as few as possible at an inflated price than than what society needs: hundreds of thousands at an affordable price.Its Centre Point writ large: economic inactivity is the bigger payer.Doggone it,that capitalism :sure hard to get yer head round it straight off!
Housing has become the central plank of our economic survival - it must recover or else !
In a merry-go-round of hype, debt, inflation, over-population the UK economy hinges on people bidding up each others' property values. There isn't much else here for the wider economy.
I believe the press reports - after all, such luminaries as the successful btl entreprenure Andreus Panyioutou is puting flesh in the game by getting back in the market having sold his empire at peak and realising huge amounts of capital.
The housing market will collapse, however, but not just yet.
When the energy crisis hits and the brain-drain happens because of under rewarded, no-stake, over-taxed young professionals (and tradesmen) start quitting Britain in droves because they get fed up with being shafted.
But for now, global property investors still see the UK as a safe punt with favourable exchange rates, particlarly in London where the market is dislocated from the rest of the UK. I should never have sold up my lovely Hertfordshire home within the M25.
P, whether prices are rising or not is a separate issue, but if is clear that prices are heavily inflated by government action.
DBC, maybe the big builders do that (I doubt it) but they aren't that big and there are plenty of smaller builders who'd happily get building.
EK,I'd agree with that, except the UK is not 'over populated' in absolute terms. We have plenty of the wrong sort of people but not 'too many people' in an absolute sense.
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