Let's have another housing bubble

We are still suffering the fallout from the biggest asset bubble in modern history, yet the politicians seem hell bent on re-inflating the property bubble in the UK.

We are still living with an over priced property sector, initially fuelled by cheap credit and the idea that property would continue to grow in value at a faster rate than the rest of the economy and now propped up by virtually non-existent interest rates.

 Now, these truths are to me self evident, the idea that there is a "property ladder" without a "property snake" in very easy to sell to people. Property never goes down runs the common perception, and the whole industry is complicit in this lie. This is really appealing as it seems to promise endless growth with no risk. The reality is though that your house doesn't get any bigger (and hence more valuable) so any rise in what is considered value is purely a collective delusion.

What continually astonishes me is that politicians of all persuations in the UK see the only answer to our economic woes. The latest example being George Osborne's ludicrous new plan to get the UK taxpayer to underwrite mortgages for new builds. The idea being that the private sector won't take the risk, therefore the taxpayer has to. Bonkers.

This will just lead to price inflation as part of the risk calculation is removed and people can borrow more than is commercially realistic.

It is a policy that is a legacy from the Thatcher years and the rush to home ownership that she ushered in. Those voters who have gained from the massive house price inflation over the past 25 years need to be placated and pandered too by the political classes. If not they stop voting for them.