But not all parts of the economy have been suffering. While UK GDP shrank by 10% in 2020, house prices increased by 10% on average — the fastest rate of growth since 2007. Similar trends have been observed in many countries around the world. How can it be that house prices are booming du...

But while the pandemic may have accelerated the divergence between house prices and the real economy, it is far from a new phenomenon. Instead, soaring house prices have been a defining feature of many advanced economies for decades. In the latest webinar in IIPP’s

“Conservative thinkers popularised the idea that workers can be convinced not to join the revolution if they own a house with a nice garden”

In the decades that followed, successive governments enacted a series of major reforms in order to widen access to the benefits of homeownership. Taxe...

With the arrival of Margaret Thatcher, the state withdrew from house building, and councils were forced to sell their housing stock through ‘Right to Buy’ and prevented from building more. Rent controls were abolished and the private rental market was deregulated, fuelling a new ‘buy-to-let’ fren...

Although the aim of this agenda was to increase homeownership, the primary effect was to transform land and property into a lucrative financial asset. Since 1995 alone, the value of Britain’s housing stock has increased by over £5 trillion ­– accounting for three-quarters of new household

“Conservative thinkers popularised the idea that workers can be convinced not to join the revolution if they own a house with a nice garden”, Kohl explained.

At the same time, the housing boom has been accompanied by soaring homelessness in almost every advanced economy. As Leilani Farha, Global Director of The Shift and the former UN Special Rapporteur on the Right to Housing, explained in the webinar, the rise in homelessness should not be viewed as...

This is because the wealth that is accumulated through the housing market is gained at the expense current and future generations who don’t own housing, who pay the price in the form of higher rents and higher rates of homelessness. Rising prices eventually choke off demand from first-time buyers...

Perhaps the key lesson of the home ownership experiment of the past half-century is that it is a zero sum game. While expanding home ownership can improve peoples’ lives by giving them security and access to a capital asset, beyond a certain point it creates the conditions for its own demise.

In reality, the stubborn commitment to home ownership likely has more to do with politics than economics. In countries where the majority of the electorate are homeowners whose wealth is tied to house prices, there is a strong political incentive to keep stoking house price inflation. In addition...

As Kohl put it during the event: “The repayment of mortgages is now essential for macroeconomic stability. But if house prices collapse, there is a risk that many mortgages won’t get paid back.”

This has placed politicians in somewhat of a bind. Any policies aimed at tackling the affordabil...

Among the panellists participating in the webinar there was a strong consensus over the broad measures that need to be introduced to tackle the housing affordability crisis: tax land and property more effectively; regulate the private rented sector; restrict the flow of speculative funds into the...