Sal Paradise wrote:
A well considered thoughtful post.
Landlords invest in property and as such they need a return that justifies that investment. Rents have escalated as demand has grown - simple supply/demand proposition and this will continue whilst ever getting on the property ladder is so tricky.
Builders invest in new builds - limited mortgage availability - so they sell large chunks to investors who have access to funds.
True: but the problem comes when the returns that can be made from owning property (not just renting, but holding for capital accumulation) exceed the returns on productive investment (starting businesses, providing capital for existing businesses to expand etc) then it becomes a drag on the economy.
Especially when the high returns from owning property come from the scarcity factor, and the property-owning section of society has a vested interest in continuing that scarcity and not enabling market forces to work better.
The situation is getting progressively worse for each successive generation of young people that enters the labour market (and starts to vote). It won't go away, and unless the government starts to do something about it they will just be breeding a bigger and bigger block of voters who are susceptible to 'radical politics'. Then when an electoral backlash hits them, there will be lots of handwringing and people saying 'how did we miss this?' like the 'liberal establishment' missed the Brexit vote coming. The answer will be, in every time they ignored the situation for young people and just said if they weren't eating avocado toast they'd have a mortgage.
