Of course, the upward pressure on house prices is primarily due to the UK's rapidly increasing population needing somewhere to live. Or did we think that all of the people who've moved to the UK in the last decade would not need anywhere to live?
Some would disagreeAnd I'm not entirely sure that the "UK's rapidly increasing population" is the main causal factor behind price rises. A decent semi could be bought in the mid-'70s for about £7000, whereas the same house would probably cost around £240000 now. Between 1976 and 1979 house prices doubled, and that couldn't be ascribed to immigration at all, since the
UK population actually fell during that period.
So it's extremely unlikely (if not simply wrong) that immigration forcing a demand for housing is responsible for the price rises. This is essentially making the assumption - as did the Barker report - that more people can afford to buy and want houses than the building industry is providing. But the application of the basic rules of the free market economy to housing, where the central plank of price reduction becomes the increase of supply, overlooks the basic element behind that model: greed.
The main element identified in the Barker report causing a lack of affordable housing was land availability. But when land became available for building many large building companies bought it up then failed to develop it. Vast swathes of land stand empty and have done for years across the South of England as builders hold back from development to maximise their profits.
There're a few other issues, too: if the house price boom was caused by the UK's rapidly increasing population, then it's a reasonable question to ask why there are
635,000 homes standing empty in England alone. Part of the reason is the absurd rules regarding VAT. If property owners leave their houses empty for ten years, the cost of reinstating them and any associated building work is zero rated. Even after a mere two years, the VAT costs plummet to just 5%.
Thus, there's no shortage of housing or land in the UK. There's a shortage of new-build, affordable housing, certainly, but that's not the same thing. Not only are building companies sitting on tracts of undeveloped land but when they do get permission to build, they will almost always attempt to impose 'variations' at crucial stages. Exactly that ploy has been tried recently in the local area, as a builder, with permission to develop land within a specified criteria started on the contract, then tried to vary its terms to build larger and more expensive houses. Why? Because they get more profit from larger builds.
There's part of me that wonders about the whole concept of land ownership. We like living in places we own, because we feel secure. But ought land or water be able to be owned as commodities? I often think about the four things we need as a species: Water, land, air and sun. They're not optional. So why should a few be able to own huge amounts of those resources and most have to pay through the nose for them? I'm not suggesting Communism, which in all its incarnations has failed to work. But perhaps we - as a society - need to address the question, because history suggests that it's not simply going to disappear.
