Why you can’t afford a home in the UK
New Economics Foundation
8222

The idea that supply vs demand is driving up house prices is just a national narrative that while fact based, misses the point. The “influx” of immigrants and “swelling population” and “scarcity of homes” just become themes to a belief system. 
What’s really happening is that loans are easy to get, for far larger amounts relative to income, and thanks to low interest rates these loans are easy to service. 
We could build 10 million homes tomorrow and keep interest rates/loans the same and prices would rise. We could build nothing and make lending criteria tough and increase interest rates to 8% and house prices would collapse. 
Housing policy to make loans easier and larger is to home prices what giving heroin to a drug addict is. It’s a temporary relief while making the problem worse. 
It’s of course in the interest of politicians to stoke the market further rather than deal with the problem.

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