Macroeconomics: UK economy, IB Economics

This could go on a number of boards but I've put it here because the UK seems to be in a similar situation as regards housing, and this Canadian solution is interesting.

In short, the Canadian government have sought to intervene to encourage the building of smaller houses of multiple occupancy instead of larger homes and apartments. Would it work here? 

I don't have an answer but it seems to be a way of getting people on the housing ladder.

Kieran Yates looks at the main parties policies on housing and suggests that neither has a proper grip on the housing crisis, largely a shortage of supply, and that both have focused on appeasing middle-class voters rather than tackling underlying structural difficulties. 

This is a brilliant article that gives a fabulous overview of the UK housing market over time and highlights significant changes in the structure of the market and how housing affordability has changed over time. 

It shows how the nature of owner-occupation has changed - rising until 2000, and falling thereafter with a commensurate increase in private sector rentals. 

It also highlights the dramatic nature of house price increases from the mid 1990s onwards, and the implications of this for affordability and the implications of this for potential homeowners, and might get you thinking about why affordability is so important. 

This BBC article looks at the changes in planning laws that are going to be announced today and, like I've already suggested, highlights the fact that rhetoric and reality often clash in this area.

That said, it's a good overview of the issues that surround planning - in the first place, it is clear that no government in recent times has met housebuilding targets, but that building more homes raises lots of issues, not least environmental. 

Critics argue that a relaxation of planning regulations will lead to the creation of slum dwellings. Supporters argue it will boost the economy at a time when it it most needed. The reality is that very little is likely to change in the short-term.

The nature of the UK housing market crisis is unpicked in the Observer by Michael Savage, highlighting the inter-generational equity issues. The level of home ownership among millennials is far lower than people of similar age twenty or thirty years ago.

A supply-side bottleneck has appeared, with the absence of the necessary electricity grid capacity starting to impinge upon the ability of local councils to solve the housing crisis. Certainly in Oxfordshire, in Oxford and Bicester, housebuilding is being delayed by this. 

The outgoing Chief Economist at the Bank of England, Andrew Haldane, has suggested that the house market is "on fire" and that this will drive growing inequality, amongst other things.

However, the phrase that interests me is the following: "Unless policymakers tackle the supply of homes". If he's actually said that then he's delusional. At what point in the past 45 years has the government ever tackled the supply of homes in a way that has seen the number of new homes being built match demand? 

If you ever want evidence of a 'non story' this is it. No government in my lifetime, I suspect, has ever hit its target for housebuilding. I'm certain that this scheme is no different.

More good Brexit news! This time from the construction sector, which has highlighted the fact that any tightening of immigration rules will affect their ability to meet its target of 300,000 new homes per year.

In the first place, they're never going to hit that target anyway. Secondly, I'm sure that Jacob Rees-Mogg's liveried footmen will lend a hand building social housing in his constituency.

Another excellent Larry Elliott article, this time looking at the 'broken' nature of the UK housing market and the potential solutions available. The brutal truth is that lots of solutions have been posited but very few are likely to increase the supply of housing, be it relaxing planning regulation, or changing the tax system. 

His proposal, look at changing the Land Compensation Act of 1961, which seems to unduly privilege landowners, at the expense of those trying to get on the housing ladder.