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To what extent is house price inflation a sympton of economic growth, or a tool that is used to stoke up temporary property bubbles to fuel borrowing to then deliver growth? The two booms I can remember (late 80's and late 90's early 00's) both saw governments anxious to win elections legislate for conditions that would deliver a short term gain in this field. If you look at our productivity figures though, they've remained pretty uncompetitive for decades, in fact I'm not so sure that house prices and the demand they inject into wage demands and hence unit costs isn't a significant contributing factor when you trace this back up stream

I do think we're reaching a point now though where a generation are going to get trapped in servile renting paying out penicious rents to landlords who contribute very little to our GDP, and find that they're never able to break this cycle due to the amount of their disposable that is haemohraged (never can spell that!). It's almost a side door tax as I think you might argue that if people were paying lower rents they'd only be spending it on foreign produced goods and services and doing even more damage to the UK's balance sheet. In this regard the government uses house prices and rents to control money supply

Somehow or other we've got to find a way of exporting again and getting overseas money to pay down our deficit. But then I'm reminded of a trade mission Cameron went onto Inida where he was beating the drum only for a member of the audience to whisper rather audibly "yeah open for business, but it makes over priced crap that no one wants"

<blockquote data-quote="Warbler" data-source="post: 2518763" data-attributes="member: 65228">To what extent is house price inflation a sympton of economic growth, or a tool that is used to stoke up temporary property bubbles to fuel borrowing to then deliver growth? The two booms I can remember (late 80&#039;s and late 90&#039;s early 00&#039;s) both saw governments anxious to win elections legislate for conditions that would deliver a short term gain in this field. If you look at our productivity figures though, they&#039;ve remained pretty uncompetitive for decades, in fact I&#039;m not so sure that house prices and the demand they inject into wage demands and hence unit costs isn&#039;t a significant contributing factor when you trace this back up streamI do think we&#039;re reaching a point now though where a generation are going to get trapped in servile renting paying out penicious rents to landlords who contribute very little to our GDP, and find that they&#039;re never able to break this cycle due to the amount of their disposable that is haemohraged (never can spell that!). It&#039;s almost a side door tax as I think you might argue that if people were paying lower rents they&#039;d only be spending it on foreign produced goods and services and doing even more damage to the UK&#039;s balance sheet. In this regard the government uses house prices and rents to control money supplySomehow or other we&#039;ve got to find a way of exporting again and getting overseas money to pay down our deficit. But then I&#039;m reminded of a trade mission Cameron went onto Inida where he was beating the drum only for a member of the audience to whisper rather audibly &quot;yeah open for business, but it makes over priced crap that no one wants&quot;</blockquote>

[QUOTE="Warbler, post: 2518763, member: 65228"] To what extent is house price inflation a sympton of economic growth, or a tool that is used to stoke up temporary property bubbles to fuel borrowing to then deliver growth? The two booms I can remember (late 80's and late 90's early 00's) both saw governments anxious to win elections legislate for conditions that would deliver a short term gain in this field. If you look at our productivity figures though, they've remained pretty uncompetitive for decades, in fact I'm not so sure that house prices and the demand they inject into wage demands and hence unit costs isn't a significant contributing factor when you trace this back up stream I do think we're reaching a point now though where a generation are going to get trapped in servile renting paying out penicious rents to landlords who contribute very little to our GDP, and find that they're never able to break this cycle due to the amount of their disposable that is haemohraged (never can spell that!). It's almost a side door tax as I think you might argue that if people were paying lower rents they'd only be spending it on foreign produced goods and services and doing even more damage to the UK's balance sheet. In this regard the government uses house prices and rents to control money supply Somehow or other we've got to find a way of exporting again and getting overseas money to pay down our deficit. But then I'm reminded of a trade mission Cameron went onto Inida where he was beating the drum only for a member of the audience to whisper rather audibly "yeah open for business, but it makes over priced crap that no one wants" [/QUOTE]

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