We didn't build it but they came anyway

Why are houses so expensive?

[Oy! I thought this was meant to be a rant!]

OK, why are houses so fucking expensive? Why does it take EIGHT average annual wages to buy a two-bedroom house in London that was built for poor railway workers 140 years ago?

If you listen to property developers they tell you it is due to planning permission laws preventing them from building. This is special pleading - houses are cheaper in other European countries where laws are tighter!

If you listen to landlords they say it is because it is so difficult to get rid of tenants, so owners are reluctant to let, so no-one can rent, so there is more pressure on the purchase market. This is even specialler pleading. It is now easier to get rid of tenants in England than in almost any other European country (including Scotland). Easier than in some states in the USA even. Much, much easier than it has been here for decades. Possibly centuries. But house prices forge ahead.

My ideas, which are all mine, but you can have them if you want:

1. Mortgage tax relief was a scam, a lie, and a deliberate plot to transfer all our money to the bankers. People fell for it because they were economically illiterate. Supply and demand and all that. If you make money cheaper for one commodity, then the amount spent on that commodity will rise. If the supply doesn't increase, the price will.
2. Stupid statistics practices in government. For 35 years they have been scared shitless of inflation (which they blame on workers wanting to get paid more) so they juggle taxes and budgets to reduce inflation. But the price of land is not included in headline inflation figures, so it doesn't count, so governments ignore it. A general rule of fiscal policy is "you can only fix one problem at a time". If you artificially try to hold down prices of one thing, the price of something else will go up. And it did. We need more inflation, not less, to give us something other than houses to waste money on.
3. Council house sales. Another easy money scam. Forced through by Tory government to reduce the power of elected local councils. They wanted all decisions to go through the central government and couldn't bear the thought that local government in some parts of the country would behave in ways they didn't like. So they bribed people into buying council houses with cheap money. Cheap money = high prices.
4. No tax on profits from house sales. Another cheap money scam.
5. Shoddy building practices, in private as much as public development. People are scared of buying new houses, so want to buy second-hand, and of course the supply of older buildings is necessarily limited, so prices rise. Britain is the only country in the world, as far as I know, where an older house sells for more money than a new one next door.
6. Prejudice. Poor people rent. If you want to be seen as not poor, don't pay rent. The prejudice is at least partly justified. In the first 3rd of the 20th century slums were mainly privately owned. Councils knocked them down and replaced them with estates which, at first, they designed well and tried to run well. Until the 1950s when they gave up and shat all over them. The combination of sink estates, high-rise point blocks, shoddy building standards, segregation of public and private land ownership, and complete lack of central government interest in anything but raw numbers (of houses built till 1979, of houses sold after that) guaranteed that all too many council estates turned into shitholes.
7. Laws (now to some extent changed) that made commercial property development exceptionally profitable. Why bother to build houses when you can build offices and make your money out of corrupt local government practices?
8. Countries don't have economies, cities do. London is the most successful, vibrant economy between Kuala Lumpur and New York, the best place to do business in half the planet. So house prices in London are naturally going to be higher than the rest of the country.
9. London house prices drive others, partly because people commute long distances on London wages, partly because people leave London with great pots of money from selling their London house and an expectation (based on experience) that the way to make even more money is to buy a house with it. So there is a production line of London escapees turning up in other towns, paying over the odds for a house, and seeing their investment pay off when the next batch of arrives. [So how come my shitty London flat is cheaper than the same sort of place would be in my home town then?]
10. Crappy public transport. People who would once have been happy to move into a distant suburb somewhere and commute to work now have to be nearer the office.
11. Fashion. In the 1940s and 1950s cities were out of fashion. Smart people and rich people wanted to move to the country - so ordinary middle-class people ended up in the suburbs which was the best they could do. The population of inner-city districts fell sharply as they tried to put as many miles between them and the working classes as possible, and as the councils shipped people en masse from the old slums to the new ones. This started to change in the 1960s - at first just for a few districts in London and a couple of other southern cities, including Brighton where I saw it happening - houses that had been up for demolition a few years earlier started to attract middle-class people. By the 1980s Glasgow and Manchester started to pick up again. By the end of the 1990s even Birmingham and Leeds, of all places, were becoming gentrified in their centres.

NB real city centres are almost always great places to live and so attract people with money. So-called "inner-city" deprivation is rarely inner-city in any purely geometrical sense. It is in fact mostly suburban. The worst places to live in London, like Broadwater Farm, or Thamesmead, or North Peckham are inner suburbs. Well, Thamesmead is an outer suburb, miles away from anywhere. Same applies to much of Glasgow, to a lesser extent to Newcastle and Manchester (there is a ring of grotty estates just round Manchester city centre though very centre itself is much nicer), though not so much as far as I know to Liverpool or Bristol. It works even more strongly in Brighton where the working classes have been being progressively exiled to windy hillsides out of town since the 1930s. It's not as big as the other cities but I include it here because I know it best, and because it has gone further down the gentrification road than any other medium-sized city in England except maybe Oxford (which I don't know well).

And there are still boarded up houses which no-one has lived in for years round the corner from me in inner London. Why? I have no idea.