zlacker

Planning permission is hard to get and greatly enhances land value. It is not supply and demand. Credit bubble with govt underwriting prices.

>>branch+(OP)
While credit conditions are a factor in property prices they don't help explain the huge increase in London rents over the past 10 years which have gone up far faster than incomes.

The private rental market in the UK is all short term lets, after the first year the landlord is free to adjust the rent. With council housing now largely gone it's an unanchored free market. Restricting supply (e.g. through difficulty obtaining planning permission) while demand increases does of course drive up rents.

Property prices are a function of interest rates and rents. Credit conditions come into play here in determining how much a prospective home owner or buy-to-let investor can borrow and pay for a property.

>>lauren+25
Rents in the UK are utterly outstripped by price rises. This is because rents are set by wages whereas prices are set by available credit (and outside money if like the UK you allow full money laundering through land).

I agree loose credit is the primary cause. However that wasn't what my post was about, I was challenging the assertion that planning permission is easily gained. It's not.

Restrictive planning is vital for creating artificial scarcity. To ramp prices with loose credit you have to push supply below demand to create an auction scenario.

>>branch+KE
I never made the assertion that planning permission was easily gained.