The property market is never just about bricks and mortar

THE UK has a housing crisis, and it sits front and centre in the political debate

- Charles Crowson

In his keynote party conference speech, Keir Starmer vowed to “bulldoze” the planning system, promising 1.5 million new homes during the next Parliament if Labour wins the election.

Perhaps that is the right number to fix the problem, perhaps it should be higher.

Imagine for a moment that the UK solved its housing problem. If we got it right, the proof of success might be that house prices stopped going up in real terms. The rate of growth in supply would have finally met ongoing demand, and you would expect some kind of price equilibrium to emerge.

Yet one reason people buy houses is that they have been a great investment. Despite a few blips — in the early 1990s and during the global financial crisis for example — house prices have gone up for 50 years. The trend is your friend.

There is a bit of a paradox here — if the housing crisis were solved and everyone who wanted a suitable dwelling had one, and this meant property prices moved only with inflation and changes in interest rates, would this mean property was no longer a good investment?