Photo 1 of 1. Click to View.
Much is made of the human impact of high and rising accomodation costs - be they deflated aspirations, increasingly austere lifestyles or people being forced to move out of home towns and cities.
Yet the wider economic impact is also important, especially as the UK's relative competitiveness in the world is in question. Money spent on accommodation (either as rent or mortgage payments) is generally not money entering the 'real economy'. This reduction in spending power hits consumption, and has a deflationary impact on the economy - hitting jobs and tax revenues and reducing the quality of life for everybody.
This is not the end of the story. The national obsession with property investment also serves to deflect enormous volumes of capital away from other forms of investment - such as into British companies and new business ventures, engines of job creation. This is further compounded by the fact that higher living costs make getting new businesses off the ground all that much harder.
After all, the first salary a budding entrepreneur has to pay is to him- or herself. Property speculation - especially buy-to-let - has undoubtedly inflated house prices beyond natural supply-and-demand dynamics. And it's hard to fault the speculators, who have done very well out it, except for the fact that many of them have trapped themselves into financial arrangements premised on price increases (interest-only mortgages, anyone?).
This issue is systemic, and only the politicians have the power to tackle it. Some of the solutions, such as a considerably increased focus on developing the UK's regional economies, shouldn't be contentious. But others, such as measures to curb speculatory behaviour, are distinctly unpalatable batons for any politician to carry. Although the UK needs courageous government more than ever, the current febrile environment provides little cause for optimism.