Sent in by Carol Wilcox to the FT:
Sir,
I have just learned from a session of the House of Lords enquiry into the housing market that since 1951 the population of London has increased by 5 per cent. I don’t know whether its housing stock has kept pace*, but the real price of London houses has increased sixfold.
This does not seem to support Professor Muellbauer's assertion, in his letter of 21 December, that the main cause of exorbitant house price inflation is supply not keeping up with income and population growth.
I would say that it has more to do with the fact that the owners of £multi million homes in Westminster pay just £1,345.48 Council Tax, less than that paid by tenants of a £599 per month flat in Weymouth.**
* It has far more than kept pace, of course.
** That is not the relevant comparison here, the point is that current Council Tax in London is very low compared to what Domestic Rates would be if they had been indexed up in line with rental values since 1951. And the abandonment of rent controls and mortgage-to-income caps in the 1980s played just as big a role.
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