A person can’t buy or rent a home without money.
Money usually only comes from work of some kind. The portion of your working life needed to pay for a safe, enjoyable home in which to live, grow and one day start a family is THE deciding factor in the quality of your life.
Therefore, the ratio of wages to the cost of a home (renting or buying) is the defining metric of your quality of life. As @rorysutherland pointed out on @LBC today, “The thing that’s keeping people poor is the cost of housing”.
The two input factors that drive this “Quality of Life” metric are wages and home prices (including rents).
So, if we accept the above argument, it means that in order to improve our Quality of Life as a country we need two things to change:
1. The abundant availability of work (higher job vacancies) on good levels of pay, growing at a sustainable rate.
2. Flatlining (not falling) house prices, so that no one is put into negative equity (which causes much harm on many levels) and so that the costs of a home gradually reduce as a portion of your wages as they rise.
To achieve these things, we also need to identify any threats to the above requirements, and combat them.
The only significant threat to rising job vacancies is incompetent government, and bad policies that hurt businesses (especially small ones which are the biggest source of jobs in the country).
The biggest threat to keeping house prices level is not low interest rates, but loosening lending. Without the relentless increasing in lending (volumes, salary multiples and term lengths) in the last 30 years, we would have avoided the cost of living crisis we now have.
All attempts to ‘stimulate’ the housing market with new lending policies (if they increase multiples or terms, or open up new markets) should be strongly opposed. In a nutshell, more jobs, less lending, is the solution to Britain’s widespread, housing-led impoverishment crisis.
(And that’s before we get into what housing costs have done to the economy! “Strong house price growth” is a double doom loop of worsening quality of life and economic depression!)