Again, the unaffordability of housing in London is both a symptom and a cause of Sir Tony’s toxic economic legacy, and, in particular, both Labour and the Tories’ reliance on importing cheap foreign labour to stimulate economic growth and keep wages low.
Politicians may not like to admit it, but new arrivals need somewhere to live, and this competition for housing drives up rents and house prices for everyone.
What’s more, when financially squeezed workers leave the capital for lower rents and mortgages elsewhere, new immigrants are needed to fill the jobs that they’ve left behind, creating an endless demand for new labour, ensuring property prices and rents can never fall back to affordable levels.
Of course, you can’t blame immigrants for getting on and filling these empty vacancies, just as you can’t blame British workers for wanting more from life than a room in a shared-house.
The fault lies solely with the Government and its refusal to implement a long-term economic plan for the country.
Its obsession with house prices and forcing down interest rates is having a negative impact on everything from the stock market to industrial output, as hundreds of billions of pounds that would otherwise have been invested in the stock market or used by the banks to help businesses grow, is being ploughed into the one thing guaranteed to give high returns: property.
It’s something the Institute for Economic Affairs (IEA) has been warning about since the late 80s, explaining that the high price of property, and the temptation to thus invest in it, will result in “a lack of incentive to save and, in consequence, lower rates of saving, investment, and economic growth than would otherwise occur”.
Far from heading such warnings, though, the supposedly business-minded Conservatives seem to be obsessed with maintaining Blair’s modern-day tulip boom.
For example, the Tories have wasted billions on giveaways like Help to Buy, which, as a report published by the IEA in February found, does very little to help get young people on the property ladder and instead stimulates demand for a product in short supply thus raising prices further.
