Don’t Do Stupid Stuff to Cut Housing Costs
Rent controls never fix the problem they’re intended to address.
Labour Party leader Hugh Gaitskell, pictured here in 1960, was an early advocate of rent controls.
Photographer: Evening Standard/Hulton ArchiveIt’s been a long old property bubble pretty much everywhere. The age of very low interest rates and easy access to credit means that in most markets prices are at or near record levels - inflation adjusted and relative to household earnings.
The last Knight Frank Global House price index showed annual nominal growth across 56 countries at 8%. Even as interest rates started their sharpest move up in 40 years, prices fell in only six markets. The result? While prices are now coming off a little in more countries, they aren’t moving nearly fast enough to cut the price of housing to anywhere near affordable levels.