A century ago, the roaring ’20s were a time of hedonistic excess. After the horror of World War I, people wanted to rebuild, but also to forget. Wealth increased, and so did prices.
While we like to think we are smarter, or at least more knowledgeable than 100 years ago, there are worrying similarities between the two periods. If anything, the excesses this time around are much greater.
Continue readingThe European Central Bank (ECB) raised its inflation target last week, at the same time going to great lengths to try to persuade people that it did not.
In the process, the central bank also stated that it will find a way to deal with an issue that is increasingly pressing: that of runaway house price inflation.
Continue readingCentral banks have been busy saving the West from its own excesses since the great financial crisis of 2007, but in the process, they have made housing unaffordable for young people, particularly in the UK.
House prices have surged in many UK cities, with record low interest rates and money printing making homes more affordable for “investors” and less so for those who actually need them as places to live in, as opposed to assets to speculate on.
Despite record low mortgages and various subsidies, homeownership is increasingly unaffordable for a rising number of people.
The consequence is deepening inequality, which makes the UK look more like a feudal, rather than modern, society.
One of the ways to tackle the so-called “housing crisis” would be to make renting an option perhaps as good, if not better, than buying a property.
Here are four ways in which the UK government could go about making renting a truly affordable option for young people in the UK – and a few of the reasons why it will never do it.
Continue readingHouse price growth is accelerating in the UK and the rest of Europe, but it is far from healthy growth. The consequences of lax rules on lending to house buyers could be devastating.
Continue readingThe UK government awarded hard-working medical staff a meagre 1% pay rise in the most recent budget, all the while splashing out on yet another indirect subsidy for house prices: the mortgage guarantee.
Continue readingForget Covid-19 and Brexit. The question to which most people in the UK would want an uncertain answer is what will happen to house prices in 2021.
The Covid-19 pandemic has forced many British people to look for the first time at their homes in a new light: as a place to live, rather than simply an investment.
The lockdown has served as a time of reflection on their home’s advantages and disadvantages and perhaps a reassessment of priorities.
The fact that chatter about a wealth tax is increasing to the point where it could become reality in the UK should not be a surprise. But it would be a very odd thing for a Conservative government to be the one to actually implement it.
When he finishes negotiating his “deal” with China, US President Donald Trump will probably try to take credit for the country’s shrinking current account surplus with the rest of the world.
However, the fact that China’s exports are slowing is not a new phenomenon, and it is not necessarily a reason to celebrate.
It is becoming increasingly difficult for central banks to surprise the markets with good news. No matter how dovish they are, investors expect them to be even more dovish still. This financial repression has facilitated the rise of populist politicians, who threaten to bring the end of central banks’ independence.