Financial and real estate experts are now advising a market freeze on current real estate prices in order to boost the current economy. The housing market is currently at a standstill, and it is estimated that if a five-year freeze were put into place, UK residents could expect up to a 10% inflation rate in housing prices which would help send a huge boost to the real estate industry, as well as the overall economic status of the UK.
- A recent paper by the Institute for Public Policy research recommends that the Bank of England sharply limit housing price increases until real wages catch up with home prices.
- Specifically, IPPR wants the Bank of England to set an independent inflation target for housing prices, which is to be set at 0 percent increase for five years, and then at around 2 percent.
- Various means could be used to meet the target, including modified lending rates regulations and policies to increase supplies of affordable housing.
“Grace Blakeley, IPPR research fellow and author of the discussion paper, comments: “Since the 1980s, the UK’s business model has rested on attracting capital from the rest of the world, which it has channelled into debt for UK consumers. The 2008 crisis proved that this is unsustainable.”
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