Wednesday 6 March 2013

It's a market, Jim, but not as we know it

From The Telegraph:

House prices posted their biggest year-on-year growth in more than two years in February as the market continued to improve, Halifax reported today... Various studies have reported improvements to the housing market since the Government started a scheme last August to boost lending.

I was always taught that the purpose or benefit of "markets' was to ensure the largest supply of everything at the lowest possible cost/price. Under perfect competition, it is impossible to make a return above and beyond the value of your own skill and efforts; if people are earning super-profits or monopoly profits, that is a sign that competition is being restricted, to the detriment of consumers and people prevented from supplying at the higher price.

But the purpose of the housing market appears to be to ensure the smallest supply of a very basic human need at the highest possible price. And if that doesn't happen of its own accord, the government will always jump in to help with "schemes" like the Funding for Lending Scheme or FirstBuy or NewBuy.

That's me told, I suppose.

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