Affordability vs. Recession: Who's Fault Is That?
A member of the Royal institution of Chartered Surveyors put his finger on one of the main dilemmas in the housing bubble. "RICS national spokesman Harvey Williams said the only way to bring house prices within reach of most young people was a reversal in market conditions."
"Mr Williams said: 'It would take a recession to get properties into the price range that first-time buyers can manage and nobody wants a recession because that isn't good for prosperity.'"
Williams has it backwards, in a way. It is clear that housing has propped up the major western economies and a recession will bring down home prices. Wouldn't a recession happen regardless of what anyone "wants"?
On the other hand, the situation that the easy money has created is that of overpriced housing. And when it reverts to fair value, that will probably spark a recession. People who want affordable housing aren't going to take any blame for that.
In a time of low interest rates, housing is still out of reach for many. Yet experts like Williams don't see any problem with facts like this? "Landlords are buying up more than 90 per cent of newly built flats in towns such as Leamington and Warwick. He said: 'Even with the increase in the amount of property available, first-time buyers are still struggling to make it onto the property ladder.'"