House prices, like everything else in the economy are controlled by supply and demand, there is no shortage of demand, so how about the supply, what 'controls' that?
Isn't it increasingly interesting to see the government running around trying to glue the heads back on the banking chickens, those who have wrecked the economy, while ignoring the plight of their victims. The problem began, and will end, with a fix on the housing market. The real cause of the whole crisis – both economic and housing is that the (ex) fat cat banks, brokers and estate agents have fed upon the hype that houses are ‘worth’ far more than they cost to build. And of course in a perverse way they are, because of outmoded planning regulations that stop people investing in property by making it all but impossible to find a building plot. In the mean time a lot of folk have gone out with their plastic cards and spent that 'equity' - that promise by the estate agents that that their house was worth many times what it would cost to build. Notice what it says on our bank notes - promise to pay the bearer...blah blah. Since when have houses been currency? well actually for the last 20 years or so they have been the only currency we had.
For many centuries in Britain when people made money, they bought land and they built homes, invested in their own, their families and indeed the nations future, this naturally balanced the housing supply (and by the way, is how all the fine ‘listed buildings’ that we so cherish came to be). Now somehow that’s all wrong, we need apparently to given permission, well sure, but...
The system has imploded, If Gordon Brown and his team will ‘do anything’ to get the economy back on track the very first thing they need to do is let people build houses again, people that is, not simply developers. That doesn’t by the way mean building all over the green belt – as the government think is the only way to accommodate their sprawling ‘eco-towns’ and other such nonsense. Anyone who has 'Google Earth' on their computers can take a 'flight' over The country and see exactly how the space is used, the idea that it's all conctrete from Brighton to Inverness comes from people who only see the world through a car widscreen. All we have to do is let people in the countryside build sensible homes in sensible locations, using their own money, from the sale of their existing property. If we take the awful inflation out of the market which has resulted from misguided planning restrictions the costs of building plots would plummet, and the price of all property would be realistic once more.
People may point out that in the USA, where the problem began, that the issue was not a shortage of property - but oversupply, so how did that work? Well simple, the same ‘fat cats’ couldn’t feed on the 'equity' of inflated house prices so they increased their client base - and gave money to people who could not afford to pay the loans, and guess what - they couldn’t pay - and they didn’t pay, and we all got the bill.
So the cause is the same, just a different shape of trough into which the snouts were so eagerly plunged. So the answer is? Quite easy actually, stop banks brokers and agents trading on peoples need for a roof over their heads, and in Britain that means letting us build our own homes again. There are billions tied up in property that would be released in moment, providing quality housing, at no cost to central government, and giving a much needed boost to the building sector: so please sir, Mr Brown sir ...‘may we have permission?’
Any would be self builders may also like to see how this could work - i.e. with destroying the countryside and without developer exploitation, may like to see http://selfbuild.wordpress.com/