Housing is not a market

I used to think that the law of supply and demand was the only law that nobody had ever managed to break. I was wrong.

Just look at these London housing market statistics. “London’s stock of completed but unsold homes has surged by almost half this year

If the market worked the way many think – and certainly most Conservative MP’s tell us, building all these homes would lead to excess supply and thus provoke a price reduction. Surely?

Wrong.

The housing ‘market’ does not work like bread or bananas. It is an investment and absolutely everyone thinks they should never lose money. Least of all the banks that lend on the ‘collateral’ of a home, that their own lending causes to increase in price. So, although the statistics are littered with London boroughs with housing shortages – Westminster and Kensington and Chelsea prominent amoung them – these excess, unsold homes will not be permitted to arrive helpfully into ‘the market’ anytime soon.

Meanwhile if borrowing money to buy one appeals – usually at around 14.5 times the average income – that might begin to look like getting on for debt bondage.

Or we can carry on renting where the ‘market’ is also broken.

As shelter is a basic human requirement what people refer to as ‘the housing market’ doesn’t behave like a market. There is no reason why it should of course. But rather than being rigged in favour of its most wealthy participants, it should be treated as part of a social purpose; and a human right and not a speculative asset, which is coincidentally capable of providing a roof over our heads.

Housing is for a home.

 

 

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