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Why are high house prices a good thing?

Updated: Jul 17, 2021

Time and time again on the TV , the news channels tell us that high house prices are a good thing, a sign of a healthy and flourishing economy, and those of us on the housing ladder can sit back in our armchairs with a smug look on our faces whilst our bank balance overflows with the gains made.

What an utter con and farce that message is.

Think about it. Have you as a house owner ever been able to reap the benefits of the ever-increasing value of your home? Well, of course not, nor were you ever supposed to.

You cannot reap the benefits as you must have a roof over your head. That is a basic survival need. Therefore if you sell your home to cash in the rewards, you simply have to go back into the housing market and pay an equally extortionate sum to get a replacement roof over your head. The truth of the matter is that a home, like food, is essential for life, and a high price for housing is about as welcome as paying a high price for bread in the shops.

So why have we been lead to believe high house prices are a good thing. The answer, as ever, lies in the people who stand to gain from high house prices - the bankers.

Bankers want the price of homes to be as high as possible. That way you are forced to borrow as mush money as possible, and the banks make as much money on loan interest as possible. Consequently, banks have been encouraging house price inflation for years, nae decades.

Unfortunately for banks, house prices have reached a limit in terms of citizen affordability. Wages simply have not kept up with house price inflation over the past decades, so banks have had to find another way to squeeze the public purse dry. Consequently, they have for the last ten years almost stopped paying interest on savings in bank deposits, with most bank accounts paying no more than 2.0% on any type of account you care to mention (and 2% is the highest you will find, not the average).

The governor of the Bank of England, Mark Carney, gave the game away recently (not that it wasn't obvious anyway to anyone that cared to switch their brain on) when he declared that the BoE was against Brexit because "it could cause house prices to fall 30%". Well, boo hoo. What a shame for the banks. My heart is bleeding.

The truth is that the public should be delighted at the prospect of lower house prices. The young especially, who cannot afford to get on the housing ladder, ought to be excited at such a prospect and ought to be supporting Brexit. Yet, curiously, we are told on the media that young people are strong supporters of Remain.

All I can say to that is that media brainwashing has worked awfully well.

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