Thursday, 30 November 2017

IT'S TRUE. BUILDING MORE HOUSES WON'T BRING DOWN PRICES ANYTIME SOON.

So says Oxford Economics, ‘Forecasting UK house prices and home ownership’, November 2016
Here's what they say:
            "we have found that the very rapid house price increases of the past 20 years do not appear to have been the result of insufficient supply. 

This conclusion is based on results that are in line with past analysis in this area. 

Could a less tightly - regulated housing market have allowed supply to respond more aggressively to dampen price growth? 

It is possible that a liber alised planning regime might have dampened the 151 percent price inc rease in the decade from the end of 1996 , but our results suggest that the effect , at any realistic rate of new supply , would have been limited .

This has important implications for a policy debate that has focused heavily on supply as both the cause of the problem of high house prices and its solution.

 It suggests instead that the major sources of volatility in house prices lie beyond housing policy’s focus on the need to provide sufficien t dwelling s to house the population at reasonable cost .

If a credible commitment to sustained high levels of new supply were made, it is possible that this could have a bigger impact on prices that the one measured here , by causing a step change in people’ s expectations of future capital gain.

No comments:

Post a Comment