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Demand not supply - is the property market's problem

 

The popular interpretation of this is it is all about supply. There just isn’t enough. That then makes the solution obvious to everyone: build more houses. “The way you get affordable homes is to build more homes,” says George Osborne, the chancellor. But once you start to look at things properly (and sign up to Uber) it is obvious that this isn’t quite right.

Look at rents. If there just weren’t enough places in the UK for everyone to live, rents would be rising as fast as house prices — and the rental yields that investors get wouldn’t be falling. That’s not what’s happening. Fathom points out that house price inflation has trumped rental inflation by 2.3 per cent a year since 2006.

http://www.ft.com/cms/s/0/e8719fd8-23ef-11e6-9d4d-c11776a5124d.html#axzz4AqrCYzGw