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John The Pessimist

5 Live Property Programme On Now

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Not a great program, the usual one sided BS.

One thing I always find strange is the received wisdom that a restricted supply of houses means that prices will always go up.

The reality, if you spend 10 minutes researching, is that house prices are linked to incomes and interest rates (aka affordability)

The affect of a limited housing supply is not to raise prices but to raise PRICE VOLATILITY, which is not quite the same thing.

http://www.jrf.org.uk/publications/tackling-housing-market-volatility-uk

Economics 101 - Price volatility in markets

http://tutor2u.net/economics/revision-notes/as-markets-price-volatility.html

We should all start using the word volatility more often - just predicting a crash is often seen as being negative - and in the long term will be just as wrong as saying things will only ever go up.

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