Britain’s passion for rising house prices is both strange and irrational because by any yardstick a surging property market is bad news. It makes people feel wealthier than they actually are and so encourages them to take on more debt than they can afford. It diverts investment from more productive uses. It helps those who own housing assets at the expense of renters. And for every boom there is a reckoning, often extremely painful.
As a result, there are two possible responses to the forecast from the Halifax that house prices will rise by 2-4% in 2019. One is to treat only modest house price inflation as some sort of national tragedy. The other is to hope that Britain’s biggest mortgage lender has got it right. Response number two is the correct one.
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