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Tories being stupid again
May. 25th, 2004 11:00 pmProblem: house prices are high, meaning that people cannot buy houses.
Proposed Tory solution: encourage (by EXTREMELY unclear means) shared equity mortgages, thus allowing people at the bottom end of their market to own at least a *bit* of their houses. Leaving aside the deeply wonky advantages of owning only a part of your house, this is pretty basic bad economics. Increase demand in a situation of static supply, and prices will go up. So, more people will be able to own a fraction of their flats, but the number of people able to own them properly will actually *drop*. This suits people who already own property, and maybe the institutions who will part own and presumably collect rent on a whole new pile of properties. Doesn't seem to do much for the people who currently can't afford to buy, who will be left paying rent for the rest of their lives. Nice one there, Mr Tory Idiot.
Proposed Tory solution: encourage (by EXTREMELY unclear means) shared equity mortgages, thus allowing people at the bottom end of their market to own at least a *bit* of their houses. Leaving aside the deeply wonky advantages of owning only a part of your house, this is pretty basic bad economics. Increase demand in a situation of static supply, and prices will go up. So, more people will be able to own a fraction of their flats, but the number of people able to own them properly will actually *drop*. This suits people who already own property, and maybe the institutions who will part own and presumably collect rent on a whole new pile of properties. Doesn't seem to do much for the people who currently can't afford to buy, who will be left paying rent for the rest of their lives. Nice one there, Mr Tory Idiot.