Ed Miliband says that houses should be lived in by families, not bought up by speculators but he misses the economic point that, when demand exceeds supply for anything, that item becomes an investment opportunity.
In the current market homes are definitely for speculators.
Using these spurious policy statements to grab headlines demeans your intelligence.
For years we have been failing to build enough houses to meet the growing demand. Arguments over whether these should be on brownfield sites, in villages or out in the North sea for that matter, have just helped to exacerbate the inevitable; not enough homes for the 21st Century.
And the responsibility for this failure falls as much on Labour shoulders as the Tories. Yes both are to blame for poor or ineffective action.
Forget immigration for the moment, Mr Farage, and look at the ageing population that means fewer homes are becoming available through death – predicable by politicians.
And the increasing numbers of single occupants; the increase in the number of middle-aged people living alone has soared by more than 50 percent since the mid-1990s. There has been an overall increase of 1.6 million since 2001.
So with all the extra demand and a pathetically poor building record we have what we all know – a housing crisis. Demand for homes outstrips the number available.
This is not the fault of private renters. After all, the rented home is still a home for someone no matter who actually owns it?
So, if you put in more incentives to buy, and you increase demand, what happens to prices when there is no balancing increase in supply?
And what kind of policy is it to cap rents? Using market intervention like this distorts the market and if you don’t allow business people to make the profit they might make decisions you don’t expect, like disposing of the home; selling it to people who will not, then, rent out . . . and those with limited means will have even less choice?
Just as reduced stamp duty is just another can of fuel on the fire of over stoked demand.
And don’t hide behind the argument that this worked in Ireland. Our circumstances are different enough to our Irish neighbour at the time they tried this to be cautious in drawing on this as a parallel.
Instead of messing with markets and distorting the figures, when are our political masters really going to get a grip on the basic need – more homes.
Mr Miliband and Mr Cameron, for the sake of our young families, please get a grip on this and build a future rather than keep tinkering with the past.
http://oliff.uk/?p=850
Update
London has just 43 ‘affordable homes for a typical young family’
Just 43 homes on the market in London would be affordable for a “typical” young family buying their first property, according to research by housing and homeless charity Shelter.
The 43 property listings – which include four houseboats – account for 0.1 per cent of the market, making London the least affordable area in the country.
Read more: http://www.theweek.co.uk/61987/house-prices-market-cools-ahead-of-general-election#ixzz3YiZ1Wnhr