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Matthew S's avatar

>Before long, however, firms build more housing

No they don't. They have not for 40 years. We have a massive historical housing build deficit.

The UK does not build nearly enough houses - This is partially planning restrictions (green belt etc) but also massive inefficiency in house building costs - from what I can tell costs (having seen the inside of some accommodation projects) have increased in real terms by quite a margin, and we build low spec small houses in the UK. I think large chunks of the UK could not build their existing housing stock again, even if given the land free, as the houses would not be worth that.

There is also (or historically was, not seen much evidence lately) a boom bust cycle meaning companies are unlikely to stretch themselves as they might get caught by the bust and go bankrupt, so they cannot borrow to build fast, so need to sell before building the next batch.

There are those who argue it is in their interests to keep supply restricted so as not to damage the value of their existing stock, but I cannot see how that maintains in a competitive environment. Maybe the planning restrictions and lack of land remove too much competitive pressure?

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Joe Potts's avatar

My native South Florida should constitute a serviceable laboratory for sustained high levels of immigration. I've lived here 70 years, from back when all our immigrants came from Georgia and New York (except for my parents, from Indiana and Austria). And I still don't speak Spanish, though I often try. Nor Portuguese. Nor Russian. Nor ...

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