I'm afraid that I rather spluttered into my fry up this morning reading this piece of absurdity in The Guardian:
Cable calls for a new house-building programme, but in truth this is a nonsense when the market dictates prices, and always will. You can build 300,000 new homes a year, as the Lib Dems want, but you can't stop those homes putting on value to a point where the people for whom they were built can't afford them.
I'm sorry, what? Does Melissa Kite think that the market is some sort of pricing fairy that decides that house prices are always going to be high?
As opposed to "the market" being the balance of supply and demand for goods and services? So that if we increase the supply while demand stays static then we expect prices to fall?
Good grief: housing completions are running at around 120,000 a year at present. If we were to have 300,000 a year then prices may or may not be lower or higher than they are now: that depends upon a host of other factors like interest rates, real wages, immigration levels and so on. But if 300,000 houses were indeed being completed each year then they would most certainly lower than if only 120,000 were a year.
The real absurdity here is that Kite is, as many lefties do, reifying "the market" in a manner that we free marketeers know we shouldn't. It's not something separate from the interactions of the rest of us: it is the interactions of us all. And that means that if supply rises then prices will, ceteris paribus, fall. And thus, if you want to lower house prices one should try to build more houses.
Or, as I've pointed out passim ad nauseam, given that the most expensive part of a house anywhere anyone wants to live is the chitty granting permission to build a house there one should issue more such chitties.