It was interesting to read that housing minister Grant Shapps has joined in the debate on the Mortgage Market Review again, saying the regulator’s measures must be proportionate and avoid unnecessary prescription.
But he also argued that the government wanted to see regulation that supports access to home ownership. Any idiot can see that the biggest hurdle to home ownership is not credit availability, but house prices.
Any idiot could also see that a short-term squeeze in credit availability will result in lower prices, allowing for greater access to home ownership.
And before people start bleating that high house prices are good for the economy, they are not. They make the economy uncompetitive, as evidenced by a recent report by the Organisation for Economic Co-operation and Development.
Our economy needs rebalancing away from the last decade of wrong-headed investment in unproductive assets and towards wealth-generating business activity.
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