You'll hear a lot of people complaining we need to build more houses as there is heavy demand for them in the UK. The National Housing Association claim there is a crisis. There is a crisis but they are very misguided as to what the crisis really is.
One piece of evidence is the fact that "House prices have risen three times faster than incomes in the past 10 years". This is true but the reasons are not shortage related. I've been very clear what the causes of this are here.
How are these people measuring the shortage of UK homes? I'm very sceptical. I've heard one explanation that the demand can be measured by some sort of qualitative data from potential buyers. That argument falls flat on its face as soon as you see that house prices plummeted in 2007 and were only stopped by 300 year low emergency interest rates.
I'm all for building if it can be paid for by the purchaser rather than a stealth transfer from savers.
I've got a feeling what they really mean is there is a shortage of houses at prices lower than current prices to which the solutions are obvious.
From the evidence I can see, UK house prices most certainly aren't correlating with population trends and are correlating with the asset price boom of the 2000s.
UK household size has been dropping consistently without any interference from any of the extreme house prices changes for many, many decades.
From 2000 to 2005 the population of Wales (my home country) grew from 2,903,085, which has risen to 2,958,876 a 1.9% increase yet prices tracked England's price growth with near perfect correlation i.e. they doubled (100% increase).
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