The Myth of UK Housing Shortage Exposed by the Bank of England

 Guest comment piece by Nan Tewari

Given the unconscionable volumes of building going on in the borough (and elsewhere) we might hope the numbers of homeless families would be falling.  Yet this is far from being the case.  

The housing shortage rhetoric is somewhat at odds with the content of this article. It may well be time for public policy to recognise that having a home must be, first and foremost, a human right.  Housing as just an asset should be coming way down the list of what is acceptable in a civilised society when so many remain without a secure roof over their head.  

 Extracts from Posiitve Money's coverage of a Bank of England  LINK

If we look at the data, [...]. Housing stock levels have consistently risen at a higher rate than population growth even in the past couple of decades, and even in London. So, according to the laws of supply and demand, if houses were a simple consumer good, prices should have fallen – obviously not the case.

In the 1930s a typical three bed house was just 1 and a half times the average annual salary. By 1997 the average house price was 3.6 times the average salary. But in just twenty years that has more than doubled to nearly 8 times, and in London an ‘affordable’ home is 13 times first-time buyers’ salaries.

Go for Green QE - not a banking black hole

The Bank of England has announced that it is to inject a further £75bn into the economy through quantitative easing. Responding to the decision, Brighton Pavilion MP Caroline Lucas said: 

While it's clear that quantitative easing is one of the only options left to get our ailing economy off its knees, the Bank of England's decision to usher in £75bn worth of unregulated QE is problematic.

Unless we impose constraints on private banks to ensure the money reaches the real economy, we're effectively throwing money into a banking black hole - a recipe for systemic economic failure and further social inequality.

What we need is properly regulated quantitative easing directed towards actually creating jobs, increasing lending to small businesses and facilitating the move towards a green economy.

A job creation strategy like the Green New Deal, for example, would ultimately pay for itself by generating incomes and boosting emerging green industries.

As the average annual energy bill reaches a shocking new high of around £1,000 per household, surely now is the time to consider a green quantitative easing programme to help fund energy efficiency solutions such as home insulation to help keep people's bills down, and create hundreds of thousands of jobs in the process.