One reason for house price increase is that it is a market targeted by international banks. Compared to lending money to poor countries, selling mortgages secured with for brick & mortar in rich countries is very safe business. Increased money supply in turn leads to more people buying houses, people owning more than one property. Increased demand in turn result higher house prices.Hex Spurt said:I'm willing to be convinced that house price rises are a direct result of immigration, but I think it has more to do with increased expectations and rising standards of living.
80 years ago the average worker would have expected to live in private rented accomodation. 40 years ago they were still renting but this time the Government was the landlord. 25 yrs ago the Goverment of the day introduced the Right to Buy scheme. Millions of renters got the chance to buy a home at a knockdown price. That was significant. Britain quickly became a nation of property owners rather than renters. Houses have been seen an investment ever since.
Downside is that people expect higher salaries so that they can afford to pay their mortgages. Higher salaries mean cost of products and services becomes higher, making the country less competetive in international trade.
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