In the ten years up to the start of the financial crisis, house prices rose by over 200%. Why?
While a lack of construction is undoubtedly contributing to higher house prices in some areas of the country, it is not the key reason for the massive increase in house prices over the past 20 years.
When you take out a mortgage, the money doesnt actually come from somebody elses savings. No. Its actually just created, electronically, by your bank typing numbers into a computer.
And its those newly-created numbers, or newly-created money, that you can use to pay for your new house. Since every mortgage works this way, all the crazy lending before the crisis created hundreds of billions of brand new money.
If we want to keep houses affordable for ordinary people, we have to look to the banks, and together take away their power to create money.
Well only get change when enough people understand how it really works. Help us spread the word.