3 ms·
>sells to whoever they can"; the builders have little incentive to care about what's cost-effective and >People have a certain approximately fixed amount of m
by floundy 1y ago
>sells to whoever they can"; the builders have little incentive to care about what's cost-effective
and
>People have a certain approximately fixed amount of money available to spend on a house, and basically all of that money will be taken by the sale.
Cannot both be true at the same time, it is a contradiction of basic economic theory.
- ben_w 1y agoHence: "When the physical cost of building the house is forces to go up, the value of the land is forced to go down." Land in the UK, for housing, is expensive. But it's only worth what the house price can get away with. Everyone gets richer => land is more expensive. Interest rates go down => land is more expensive. This is also why UK houses are so small compared to much of EU, US. Materials are cheap, land is where the money goes.