A quite blinding demonstration of what’s wrong with Nu Labour….it just doesn’t get markets:

In an interview with the
Guardian, Mr Prescott underlined the government’s frustration at the
cost of housing, in spite of prices dipping slightly on the open
market, saying: "We’ve got interest rates low, inflation low, why the
hell [is the price of building a house] going up when in other
countries it only moves at the rate of inflation? It is unacceptable
that prices have been going up at 10 times the rate of inflation, more
than that."

Now, I tend to agree with those that say there has been a bubble in UK house prices recently. But the comment above is quite breathtaking in its idiocy. If interest rates are low, then you expect assets which are normally bought with borrowed money to rise in price. Throw in a grossly restrictive planning system (part of Big John’s remit as I recall) and endless legislation on access, fire regs, standards, floor space etc (I recently had the local council threatening to declare an entire building uninhabitable because my kitchen did not have 1.5 sq m of work space.) which all add to the cost of building or restoring a house….and yes Jonny Boy, you will get rising prices.
Sheesh.