Monday, July 19, 2021

Dominic Frisby - Why Houses Cost So Much - And What To Do About It

 Dominic Frisby is a bit of a libertarian and a populist, but he has some good points about the causes of house price inflation here in the UK, and probably in many other countries too. 

Dominic Frisby - Why Houses Cost So Much - And What To Do About It


NeilW said...

The interest rate hobby horse again "money must be expensive".

Perhaps time to realise that domestic credit expansion cannot be controlled - particularly by interest rates. Because money is easy to create and will be created no matter what people do.

So let the asset prices go where they will. And instead remove the power of exclusion. If house capacity is 10% more than the population increase then removing exclusion power will drive rents below the service cost of mortgages as competition does its thing. Force unmaintained buildings to be sold at auction. Force unoccupied buildings to be rented at auction. Instil a 'use it or lose it' attitude in the property market.

It's the power of exclusion that is the problem, not the level of interest rates.

Unknown said...

Local authorities keep the register of those in housing need. They used to respond to this need by borrowing to get homes built. Thatcher intervened to reduce this borrowing to a trickle. As the Guardian recently made clear the Conservative Party relies heavily for party funding on those who benefit from the housing market which will include insuring there's over-bidding and therefore excessive inflation in the market.

"House prices more expensive relative to earnings than they've been in a 120 years."