My piece on how UK house prices will fall by 30% prompted a range of comments. I am not surprised, house prices and the weather are two defining British obsessions. A couple of folks asked why the media/politicians always talk about rising prices as a good thing when they are patently nothing of the sort.
Incidentally, the reason that they are a bad thing is that unaffordable housing prevents labour mobility thus making the UK economy less productive. Moreover the need to a) borrow vast sums to purchase a place and b) spend vast sums funding and repaying that debt leaves the UK population as a whole far too heavily overborrowed and b) have less cash to do sensible things like save for a pension.
So why do the media and politicians say that rising house prices is good news and vice versa? Simple. Demographics. Younger folk (who cannot afford to “get on the ladder”) and the poorest folk who are equally excluded are far less likely to a) vote or b) read newspapers than those who typically own homes. And thus the newspapers are simply buttering up their readers and politicians are simply pretending to have the interests at heart of those who are most likely to troop down to the polling station. It is naked self-interest, nothing more and nothing less.
Meanwhile a reader in his late twenties emails me to say that a) I am wrong – prices will not fall and b) he is saving vast sums by buying an apartment and not renting and handing over cash to a “fat 50 year old landlord.” On the first matter, assertion is not the same as reasoned argument. But I should also pick him up on the second matter
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