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The Bank of England’s shifting stance on house prices has big implications
- lifeisstillgood 7y agoTldr: House price increases (in the UK) over past twenty years can not be explained by lack of supply (so the build more houses movement is likely to fail). The reason seems to be houses as an investment asset - and the rise in prices has been accounted for by the decrease in cost of money. In other words solving the housing crisis is not a function of building more houses - it needs (and this is not in articles / Mulhairn analysis) active discouraging of houses as asset investments (taxing second homes etc) and focused welfare services to stop people falling off the bottom of the ladder. It's going to be a bumpy correction across the entire Wesrern world
- ohiovr 7y agoHousing prices cannot rise forever. I'm glad there are people in the banking industry that are not oblivious to this. More money must be spent on housing even if you rent. This means less money can chase other goods and services. That is the reason it looks like we have low inflation. The puzzle is now complete.