1 - SUPPLY AND DEMAND - simples really isn't it. If we built more housing (social or private) there would be a better, supply and prices would fall. Or we could further restrict immigration. Reform planning, tax breaks for new build etc. It's not hard is it...
2 - MORTGAGE RESTRICTIONS - Yes, its all the fault of those horrible young people and there pathetic demands to own their own home, their sad desperation. Punish them! That's what we need to limit, aspiration. Never mind the inconvenient facts such as mortgage lending is well down from the boom of the naughties and indeed, without Government support, it would be even further down. Look at the graph above, its not mortgage lending that is causing the nascent property bubble is it? It's more likely overseas equity investors into London and a trickle down from there.
3 - INTEREST RATES - Terribly old-fashioned, but hey ho. Raising rates will help savers, make mortgages more expensive and take the heat out of any boom. This is a good idea, along with running down or stopping QE.
4 - HELP TO BUY - Why not just stop this or recommend this is stopped. It's a much easier way to cool demand as this policy is pure politics and does indeed risk stoking a bubble. Better to end this subsidy than to restrict mortgages.
It's rare for me to agree with George Osborne, but he said some looking at the facts rather than the Vince Cable populist approach would be a good idea. He is right in this case for once.
