Dominic Cummings spate with then Chancellor of the Exchequer, Sajid Javid may have sharpened the knives for his eventual demise, but it was on policy where he will be seen to be on the wrong side of history. This was written as a response to an article in Quillette:
Advisors to rulers, wrote Machiavelli in his Discourses, would achieve their best results by “putting their case with moderation instead of assuming responsibility for it, and by stating one’s view… (from the Article)
Dominic Cummings was right about education- several of the academy schools which he instituted with Michael Gove have provided results which some might deem miraculous, given they serve poor multi-ethnic high crime communities, yet seem to outperform institutions like Eton, in terms of numbers of students going on to Oxbridge. These reforms are now providing a model for improvement for England and Wales more generally- although Scotland has elected to go a separate path, and is rapidly falling behind as a result.
Unfortunately, his spate with Sajid Javid put him on the wrong side of history in relation to housing reform. He should have recognised the UK housing market for what it is- a deeply corrupt oligopoly, both in terms of the artificial (and deliberate) failure of the largest market players to supply demand, and in relation to the death grip the practice of Land Banking has had, insofar as it has either delayed or forever eliminated the prospect of so many young people ever settling down and having a family.
Liam Halligan, an economist for the Telegraph and now news presenter for GB News has written a book on the subject, Home Truths, and whichever political party grasps the nettle and follows the recommendations contained within could potentially own British politics for the next twenty years, and facilitate a rise of the British economy which helps it outstrip that of Germany’s, in terms of GDP. Libertarian notions aside, it’s a clear case of coercion through game-rigging.
Key to the understanding of how this could happen is through an examination of what is happening in Texas, at Silicon Valley’s expense. Cynics will argue that it is all about tax, and tax is indeed a factor. But more important is the ability to house wealth-creating workers in areas which furnish housing affordability and safe communities. Texas provides both, whilst San Francisco provides neither. We have the safety, the universities, the leafy environs, restaurants and pubs which foreign visitors rave about when returning home, but the one thing we are lacking is easily affordable housing, ideal for starting a family.
Building land costs £1 million per acre in the South of England, and £300,000 in the North. In the South, this means £150K to £200 per building plot before the foundations have even been laid down. To be sure, we can learn a lot about the libertarian approach to planning and zoning which Texas has instituted, but it will all come to naught when the asset holding class decides to buy up as much land is necessary, as soon as it becomes available, in order to protect their price-gouging, upfront-rentier investments.
It’s the single biggest barrier to Britain becoming the patent generating capital of the twenty-first century.
It might well also be the case that Dominic Cummings loathing for Sajid Javid stems from this fundamental disagreement. It isn’t clear whether the grounds for disagreement is political or philosophical, but if the latter is the case then an overweening respect for private property rights has blinded Mr Cummings to the necessity of facilitating a society which is stable and a polis which is not aggrieved enough to look for drastic (and foolish) solutions. Trevelyan’s error may well have been more obvious and immediate (aggravating the Irish Potato Blight/Famine through an insistence on free markets in a time of crisis), but Dominic Cummings error might well prove more spectacular for Britain in the long-run, and not in a good way.
"the asset holding class decides to buy up as much land is necessary, as soon as it becomes available, in order to protect their price-gouging, upfront-rentier investments."
Geary my man, you are almost a member of the Cetacean Communist Party even if you don't know it yet.
It’s a Ponsi scheme. The land banking inflates the cost of clay from what was once very cheap ground into massive money and you must pay the fare in order to build. This supply to demand ratio knocks on from labour cost hikes to kitchen costs and windows and bricks; right through the direct industry and inclusive of any indirect employments involved in houses such as furnishings and even transport. Everyone profits massively. Window and kitchen companies make between 40 and 60% profits.
At this point Mary and Joe take out a mortgage on a 400k home. What profits do the banks actually make on this money? Where do the bank owners park that money? Who bails them out when it all goes wrong?
The system appears capitalist and a free market, but the wealth is actually being funnelled into very few hands. The government is doing well off of all the tax revenue, but it would of done well without enacting protectionisms for banks and corporate power. What’s crazy is that the ladder is being cut at the bottom and it’s getting increasingly more difficult to get onto it. Talk to your renters who work in ok jobs and they’ll tell you that they don’t think they’ll ever own their own home.
Running this system this way and mixed with inflation surpassing wage increases is increasingly adding to the percentile figure of serfdom. It’s creating an ever increasing percentage of young people destitute to the system and all in the name of capitalism which is in fact designing for wholesale socialism one generation away.
The vulnerability to asset owners is shocking too. For a start state decisions and policy’s such as lockdown or any debts are met with stimulus bills and borrowing which is signed off by all citizens regardless of choice or position. Little things like adding 3 yrs until pension eligibility and that had to be a money grab of trillions alone by the state from the people to bail out the banks. Why wasn’t that a loan to these banks aye? Anyways so they revert to money printing and take the value of everyone’s currencies buying power down.
Then there’s the ever increasing tax burdens on the middle classes that pay for it all; capital gains, inheritance tax, and how many people die without having a will in place? It’s very clever and it’s all by design. As the costs keep increasing the living standards of the middle classes drop and drops further and even the value of ones pension because of inflation and fiat money to look after the more vulnerable is dwindled. The government in a crisis will incur losses which it will tax the middle classes for. This is why I describe it as diamond collecting. Folks are working their asses off now to buy into the dreams of their fathers and the difficulty of doing so under these conditions is remarkably stressful. It’s causing much angst and a cry for change.
Look at the SJW’s and woke activists, socialists, they are disproportionately young people. Can we actually believe that the west is increasingly turning into some militant communist based ideological breeding ground? The rub for me comes from comparing that first house I bought 32 yrs ago and how much of a secure asset that house felt like, now I have 8 including my family home and should feel enormously secure in this fact, but I do not. The hawks are hovering.
"It’s creating an ever increasing percentage of young people destitute to the system and all in the name of capitalism which is in fact designing for wholesale socialism one generation away."
Yup. The righties have only their own greed and hypocrisy to blame if people end up turning to Bernie and AOC for relief. It could get to the point where ordinary folks would rather live in Venezuela. Dolphinomics: We have the fish that we catch. If we are catching more fish than previously but somehow eating fewer it must be -- it is unavoidable, it is mathematically necessary -- that someone who does not catch fish themselves is eating ours. They can call themselves whatever they like, but I call them parasites.
This you're either a conservative or a socialist thing is nonsense. It lacks the common ground that topics such as this show. The partisan politics is palpable.
Geary put the article out on forum and he was basically called a socialist.
One only needs to follow the rent trends, repossessions, affordability aspects or any manner of complicit government policy on land banking, UK building tax thresholds or numerous other factors to see the game has a short shelf life.
Young people with expectations of buying a home like Mummy did are being systematically hamstrung. The pressures grow yearly as their buying power decreases and all the time those darn houses fall further out of their grasp.
One of my tenants broke down in tears after a rant about just this a few months ago. She teaches computer studies at a local college, pays her rent on time and has enough money to pay all her bills, run a car which she needs for travelling to work, has a few hobbies and about £50-60 a week for socialising. Like she says " How the hell do I save a deposit, pay the lawyers, all the costs of moving and furnishing a house and if I do will the interest rates make it unaffordable anyways."
I see and hear this all the time and the house prices keep on increasing. It's hard to see a conservative government surviving in a decades time without some serious systematic change. Head burying just won't cut it, nor will posturing.
"This you're either a conservative or a socialist thing is nonsense."
Yup. I suppose people have always had an obsession with labels but this is surely being exploited for political ends as a divide and rule strategy.
"Geary put the article out on forum and he was basically called a socialist."
Sure. He fails the purity test by daring to see things both ways. One thing you never say to a fundamentalist is: "You know,the other guys really do have a point when it comes to ...". You are with us or you are with the terrorists.
Politics, Wokism, left wing, right wing, Masks on, off. It's all become like some devout worshipping of a cause; like a religious activism where what you say, do or show signals your identity and group. There are few people who's minds aren't fully committed to whichever of these tribal groups and who can both recognise the madness of it and frustrating as it is, retain patience, objectivity, balance, perspective and actual intent to fathom out a path through it.
It was indeed bad enough that politics was engineered into everyday life a generation ago, but Covid has pushed through panic and fear an endless way of tying in and activating people into opposing herds.
It really is time for classical liberals and heterodox thinkers to be arbitrators of the public square. If only to stop people tearing one another apart, though with massive tribes of activated mobs they too may not be thanked for sharing their sanity.
Good topic. Home ownership is foundational to a free society and should be encouraged by government policy. Problem is, when you give government the opportunity to make policy, they generally hose things up worse than they found them.
Whether US or UK shortage drives price and shortage can be natural or artificial. Zoning drives shortage as does large scale land banking and house banking as a number of corps are doing in US. Not a good trend. Do I trust government to find a solution? Nope.
Well, they are not incentivised to find a real solution. To do so would be to jeopardise the voters upon which they most heavily rely- older homeowners, who have benefitted heavily from rising house prices. For the other side, the prospect of all those disaffected young people is too juicy a temptation to resist...
I think Geary is correct and he’s not advocating socialism either. The largest building companies and the banks are drip feeding land at a massively inflated rate.
It is harder to build houses now because the plots suddenly catapulted in price around thirty years ago. At that point a small builder in some cases could break out of sole tradership and into the bigger league.
Most building work is sub-contract to housing firms. It is labour only. the wages are good but they are limited and capped by tax brackets and vat.
This is incredibly difficult to explain. Ok. So firstly you have say 90% of builders that work the sites. They will earn between 750£ and 1500 per week. Taxed at 20% until in the 40k mark then their taxation is around 40%. Given there is no actual profit and the builders can’t afford to outlay for a plot and materials and labour and other costs they fill up their ambition on ok to decent wages exclusively to these big corporate builders.
Let’s go to the sole traders and small limited builders, most of whom are sole traders and capped at 85k vat. They never wish to turn over more than 85k as they then must charge 20% more when the tender for work and the sole traders will capture all their work. It makes being vat registered extremely difficult unless you have vat registered businesses directly passing you that work.
So back to a sole trader wishing to get rich building. First thing he’d need to do is have his customers pay his subcontractors directly so that he could take his turnover right up to the 85k threshold without it drawing him into vat land and maximising his own space within that cap. There is nothing illegal about taking out a contract but having the customer pay each tradesman individually. Given that building materials are factored into the turnover and factoring the trends of the percentages of builders who in the private sector who are sole traders and not vat registered builders it is easy to see that they are happy enough to average annual pays between 30k and 60k.
What I did the last time I got rich was to buy the worst house on the best street and for cash. Then do it up. Then save out of that 60k and buy another, do it up and rent it. After having a few houses the process speeds up. Once I had a number of houses, I had twelve. I then sold 4 to fund building 3 houses on a plot which I bought. I profited about 40% minus capital gains tax, which was 240k on that one build. The 2007/8 crash wiped me out and it’s taken me 13 years to get back to 7 houses. What I did was extremely risky to do. There is a semblence of a free market but it isn’t what most people think. 30 yrs ago I could of bought a plot for 20k, but now they’re 100k plus and that’s in the cheapest area in the UK. But the banks won’t lend us the plot and development costs, we have to self fund. You’d think they would in a free market? But we’d be able to undercut the big boys and that isn’t allowed.
The trend now is house shares.Young people are renting a house between them to reduce costs. Many people simply can’t get on the housing ladder. People that easily would of a generation ago. Some just say it’s the market and it is what it is, well fair enough, but let’s try and imagine this situation in another twenty years time following current projections. Well I’ll be 72, the 20yr olds now who will be 40 will still be renting and the house purchases will be for renters. What about 50 years from now?
Please note that the renters I’m speaking about aren’t unemployed and on government handouts, these are people who 30 years ago would have had enough surplus money to have funded a mortgage and still had a social life, people who’s own parents often did this relatively easily. Either the banks start offering better terms and/or lifetime mortgages or else in time only the very wealthy will own houses. Jeremy Corbyn turned many people toward socialism using this very argument. People who’s parents were often naturally inclined to conservatism. I find it easy to understand why. Disenfranchisement, inflation and the high cost of living. Owning your own home ought to be much more than a dream.
Geary, loved your posts on Quillette but this is a recipe for a massive meltdown in the wealth of homeowners. You need to fine-tune this attack so that you pick up land bankers etc.
You and Liam Halligan seem not to have considered who would support these homeowners suddenly far poorer due to the unintended consequences of this well-meaning but simple solution to a complex issue.
It is a common complaint from young people who refuse to save, I know two of them intimately, yet even they have finally bought into the housing market, in the middle of a boom?
I largely agree with you on the issue of existing homeowners- it's a Gordian knot, that's for sure. But there has always been a pretty fixed relationship between earnings to borrowing ratios, and any deviation from this norm of standard lending practices courts disaster in macro-economic terms. A starter home should only really cost 3.5 times the annual income of the primary earner, plus 1.5 times the income of the secondary earner.
Now, there are ways to mitigate this hard and fixed rule lending practices. A larger deposit of say 25% of the total value of the home is always a good idea. But one can look at a graph of ratio of earnings to borrowing by year, and quickly see that all of market crashes are predicted, even caused, by high ratio rates. Asset bubbles of this kind make the entire economic system susceptible to the slightest shock, for the simple reason that as living costs eat up more of available consumer spending, the slightest downturn in confidence can have markets holding cash against the rainy day scenario.
It's also a key predictor of mortgage repossession rates and homelessness, making both problems far, far worse. Here's the thing though- one could fix the problems in the supply chain relating to land and the deliberate undersupply of homes by the larger building firms and there would still be huge issues to fix. For a start, building supply chains would have to adjust, and these aren't generally areas where it's easy to ramp up production.
Plus, taking the UK as an example- we could build 400,000 homes a year for ten years and it wouldn't even dent prices at all- such is the critical lack of supply in demand, which has been building since the early nineties. All we would really be doing is insuring against further house price rises.
Here's the thing- what it would do would be to prime the pump of the virtuous cycle. The rises in land costs have been like a cancer, cutting off blood flow to the healthier parts of the body. Our building industry has been operating at well below 60% of total demand for decades, and this has repercussions back through the supply chain, and in terms of the multiplier effect from a stifled and strangled source of value creation.
The Chinese understand this. They have built entire ghost cities, whilst simultaneously creating more apt and appropriate housing. It is not an understatement to say that without their housing boom, the deliberate opening up of new cheap lands from rezoning, there would have been no economic miracle in China. To give you an idea of the size and scale of this particular virtuous cycle- in one decade China poured more concrete than America did in the entirety of the twentieth century.
"the asset holding class decides to buy up as much land is necessary, as soon as it becomes available, in order to protect their price-gouging, upfront-rentier investments."
Geary my man, you are almost a member of the Cetacean Communist Party even if you don't know it yet.
It’s a Ponsi scheme. The land banking inflates the cost of clay from what was once very cheap ground into massive money and you must pay the fare in order to build. This supply to demand ratio knocks on from labour cost hikes to kitchen costs and windows and bricks; right through the direct industry and inclusive of any indirect employments involved in houses such as furnishings and even transport. Everyone profits massively. Window and kitchen companies make between 40 and 60% profits.
At this point Mary and Joe take out a mortgage on a 400k home. What profits do the banks actually make on this money? Where do the bank owners park that money? Who bails them out when it all goes wrong?
The system appears capitalist and a free market, but the wealth is actually being funnelled into very few hands. The government is doing well off of all the tax revenue, but it would of done well without enacting protectionisms for banks and corporate power. What’s crazy is that the ladder is being cut at the bottom and it’s getting increasingly more difficult to get onto it. Talk to your renters who work in ok jobs and they’ll tell you that they don’t think they’ll ever own their own home.
Running this system this way and mixed with inflation surpassing wage increases is increasingly adding to the percentile figure of serfdom. It’s creating an ever increasing percentage of young people destitute to the system and all in the name of capitalism which is in fact designing for wholesale socialism one generation away.
The vulnerability to asset owners is shocking too. For a start state decisions and policy’s such as lockdown or any debts are met with stimulus bills and borrowing which is signed off by all citizens regardless of choice or position. Little things like adding 3 yrs until pension eligibility and that had to be a money grab of trillions alone by the state from the people to bail out the banks. Why wasn’t that a loan to these banks aye? Anyways so they revert to money printing and take the value of everyone’s currencies buying power down.
Then there’s the ever increasing tax burdens on the middle classes that pay for it all; capital gains, inheritance tax, and how many people die without having a will in place? It’s very clever and it’s all by design. As the costs keep increasing the living standards of the middle classes drop and drops further and even the value of ones pension because of inflation and fiat money to look after the more vulnerable is dwindled. The government in a crisis will incur losses which it will tax the middle classes for. This is why I describe it as diamond collecting. Folks are working their asses off now to buy into the dreams of their fathers and the difficulty of doing so under these conditions is remarkably stressful. It’s causing much angst and a cry for change.
Look at the SJW’s and woke activists, socialists, they are disproportionately young people. Can we actually believe that the west is increasingly turning into some militant communist based ideological breeding ground? The rub for me comes from comparing that first house I bought 32 yrs ago and how much of a secure asset that house felt like, now I have 8 including my family home and should feel enormously secure in this fact, but I do not. The hawks are hovering.
"It’s creating an ever increasing percentage of young people destitute to the system and all in the name of capitalism which is in fact designing for wholesale socialism one generation away."
Yup. The righties have only their own greed and hypocrisy to blame if people end up turning to Bernie and AOC for relief. It could get to the point where ordinary folks would rather live in Venezuela. Dolphinomics: We have the fish that we catch. If we are catching more fish than previously but somehow eating fewer it must be -- it is unavoidable, it is mathematically necessary -- that someone who does not catch fish themselves is eating ours. They can call themselves whatever they like, but I call them parasites.
This you're either a conservative or a socialist thing is nonsense. It lacks the common ground that topics such as this show. The partisan politics is palpable.
Geary put the article out on forum and he was basically called a socialist.
One only needs to follow the rent trends, repossessions, affordability aspects or any manner of complicit government policy on land banking, UK building tax thresholds or numerous other factors to see the game has a short shelf life.
Young people with expectations of buying a home like Mummy did are being systematically hamstrung. The pressures grow yearly as their buying power decreases and all the time those darn houses fall further out of their grasp.
One of my tenants broke down in tears after a rant about just this a few months ago. She teaches computer studies at a local college, pays her rent on time and has enough money to pay all her bills, run a car which she needs for travelling to work, has a few hobbies and about £50-60 a week for socialising. Like she says " How the hell do I save a deposit, pay the lawyers, all the costs of moving and furnishing a house and if I do will the interest rates make it unaffordable anyways."
I see and hear this all the time and the house prices keep on increasing. It's hard to see a conservative government surviving in a decades time without some serious systematic change. Head burying just won't cut it, nor will posturing.
"This you're either a conservative or a socialist thing is nonsense."
Yup. I suppose people have always had an obsession with labels but this is surely being exploited for political ends as a divide and rule strategy.
"Geary put the article out on forum and he was basically called a socialist."
Sure. He fails the purity test by daring to see things both ways. One thing you never say to a fundamentalist is: "You know,the other guys really do have a point when it comes to ...". You are with us or you are with the terrorists.
Politics, Wokism, left wing, right wing, Masks on, off. It's all become like some devout worshipping of a cause; like a religious activism where what you say, do or show signals your identity and group. There are few people who's minds aren't fully committed to whichever of these tribal groups and who can both recognise the madness of it and frustrating as it is, retain patience, objectivity, balance, perspective and actual intent to fathom out a path through it.
It was indeed bad enough that politics was engineered into everyday life a generation ago, but Covid has pushed through panic and fear an endless way of tying in and activating people into opposing herds.
It really is time for classical liberals and heterodox thinkers to be arbitrators of the public square. If only to stop people tearing one another apart, though with massive tribes of activated mobs they too may not be thanked for sharing their sanity.
Good topic. Home ownership is foundational to a free society and should be encouraged by government policy. Problem is, when you give government the opportunity to make policy, they generally hose things up worse than they found them.
Whether US or UK shortage drives price and shortage can be natural or artificial. Zoning drives shortage as does large scale land banking and house banking as a number of corps are doing in US. Not a good trend. Do I trust government to find a solution? Nope.
Well, they are not incentivised to find a real solution. To do so would be to jeopardise the voters upon which they most heavily rely- older homeowners, who have benefitted heavily from rising house prices. For the other side, the prospect of all those disaffected young people is too juicy a temptation to resist...
How does one recover a society which has abandoned ethics and religion? Law is simply inadequate.
I think Geary is correct and he’s not advocating socialism either. The largest building companies and the banks are drip feeding land at a massively inflated rate.
It is harder to build houses now because the plots suddenly catapulted in price around thirty years ago. At that point a small builder in some cases could break out of sole tradership and into the bigger league.
Most building work is sub-contract to housing firms. It is labour only. the wages are good but they are limited and capped by tax brackets and vat.
This is incredibly difficult to explain. Ok. So firstly you have say 90% of builders that work the sites. They will earn between 750£ and 1500 per week. Taxed at 20% until in the 40k mark then their taxation is around 40%. Given there is no actual profit and the builders can’t afford to outlay for a plot and materials and labour and other costs they fill up their ambition on ok to decent wages exclusively to these big corporate builders.
Let’s go to the sole traders and small limited builders, most of whom are sole traders and capped at 85k vat. They never wish to turn over more than 85k as they then must charge 20% more when the tender for work and the sole traders will capture all their work. It makes being vat registered extremely difficult unless you have vat registered businesses directly passing you that work.
So back to a sole trader wishing to get rich building. First thing he’d need to do is have his customers pay his subcontractors directly so that he could take his turnover right up to the 85k threshold without it drawing him into vat land and maximising his own space within that cap. There is nothing illegal about taking out a contract but having the customer pay each tradesman individually. Given that building materials are factored into the turnover and factoring the trends of the percentages of builders who in the private sector who are sole traders and not vat registered builders it is easy to see that they are happy enough to average annual pays between 30k and 60k.
What I did the last time I got rich was to buy the worst house on the best street and for cash. Then do it up. Then save out of that 60k and buy another, do it up and rent it. After having a few houses the process speeds up. Once I had a number of houses, I had twelve. I then sold 4 to fund building 3 houses on a plot which I bought. I profited about 40% minus capital gains tax, which was 240k on that one build. The 2007/8 crash wiped me out and it’s taken me 13 years to get back to 7 houses. What I did was extremely risky to do. There is a semblence of a free market but it isn’t what most people think. 30 yrs ago I could of bought a plot for 20k, but now they’re 100k plus and that’s in the cheapest area in the UK. But the banks won’t lend us the plot and development costs, we have to self fund. You’d think they would in a free market? But we’d be able to undercut the big boys and that isn’t allowed.
The trend now is house shares.Young people are renting a house between them to reduce costs. Many people simply can’t get on the housing ladder. People that easily would of a generation ago. Some just say it’s the market and it is what it is, well fair enough, but let’s try and imagine this situation in another twenty years time following current projections. Well I’ll be 72, the 20yr olds now who will be 40 will still be renting and the house purchases will be for renters. What about 50 years from now?
Please note that the renters I’m speaking about aren’t unemployed and on government handouts, these are people who 30 years ago would have had enough surplus money to have funded a mortgage and still had a social life, people who’s own parents often did this relatively easily. Either the banks start offering better terms and/or lifetime mortgages or else in time only the very wealthy will own houses. Jeremy Corbyn turned many people toward socialism using this very argument. People who’s parents were often naturally inclined to conservatism. I find it easy to understand why. Disenfranchisement, inflation and the high cost of living. Owning your own home ought to be much more than a dream.
Geary, loved your posts on Quillette but this is a recipe for a massive meltdown in the wealth of homeowners. You need to fine-tune this attack so that you pick up land bankers etc.
You and Liam Halligan seem not to have considered who would support these homeowners suddenly far poorer due to the unintended consequences of this well-meaning but simple solution to a complex issue.
It is a common complaint from young people who refuse to save, I know two of them intimately, yet even they have finally bought into the housing market, in the middle of a boom?
I largely agree with you on the issue of existing homeowners- it's a Gordian knot, that's for sure. But there has always been a pretty fixed relationship between earnings to borrowing ratios, and any deviation from this norm of standard lending practices courts disaster in macro-economic terms. A starter home should only really cost 3.5 times the annual income of the primary earner, plus 1.5 times the income of the secondary earner.
Now, there are ways to mitigate this hard and fixed rule lending practices. A larger deposit of say 25% of the total value of the home is always a good idea. But one can look at a graph of ratio of earnings to borrowing by year, and quickly see that all of market crashes are predicted, even caused, by high ratio rates. Asset bubbles of this kind make the entire economic system susceptible to the slightest shock, for the simple reason that as living costs eat up more of available consumer spending, the slightest downturn in confidence can have markets holding cash against the rainy day scenario.
It's also a key predictor of mortgage repossession rates and homelessness, making both problems far, far worse. Here's the thing though- one could fix the problems in the supply chain relating to land and the deliberate undersupply of homes by the larger building firms and there would still be huge issues to fix. For a start, building supply chains would have to adjust, and these aren't generally areas where it's easy to ramp up production.
Plus, taking the UK as an example- we could build 400,000 homes a year for ten years and it wouldn't even dent prices at all- such is the critical lack of supply in demand, which has been building since the early nineties. All we would really be doing is insuring against further house price rises.
Here's the thing- what it would do would be to prime the pump of the virtuous cycle. The rises in land costs have been like a cancer, cutting off blood flow to the healthier parts of the body. Our building industry has been operating at well below 60% of total demand for decades, and this has repercussions back through the supply chain, and in terms of the multiplier effect from a stifled and strangled source of value creation.
The Chinese understand this. They have built entire ghost cities, whilst simultaneously creating more apt and appropriate housing. It is not an understatement to say that without their housing boom, the deliberate opening up of new cheap lands from rezoning, there would have been no economic miracle in China. To give you an idea of the size and scale of this particular virtuous cycle- in one decade China poured more concrete than America did in the entirety of the twentieth century.