Rob Williams has an excellent article on the Compass website today:
The great property bubble has been, and continues to be, a disaster. Wealth hasn’t been created, it’s simply been redistributed, and to those who are already well off. It’s siphoned away money that could have been invested in more productive parts of the economy.
For short term electoral reasons, the government would like house prices to rise. For the sakes of the millions priced out of a decent home and for the sake of a balanced economy based on sustainable investment, we must hope they don’t.
Thatcher revolutionised the housing market through the ‘right to buy scheme’. Britain is now close to being the ‘property owning democracy’ of which she spoke. Given that 70% of voters are now owner occupiers it is no surprise that governments, of all colours, will aim to give these people what they want. But this is not what centre-left politics should be about. We need to create a new housing market, where prices rise in line with earnings, where people think of their home as a place to live not a source of cash and where tenants (whether private, social or council) are not seen as lesser beings than owners. This will mean building a lot more homes, replenishing the social and council stock and probably being more prescriptive with banks as regards their lending policies. It is hard for any government to say to 70% of its electors, we don’t want the value of your assets to rise so quickly, but, for a centre-left government, it is necessary.