I think one of the possible solution is granting those on benefits property outside of London and start building council flats in other parts of GB only from now on. When I lived in London I was amazed at how many young and healthy british, particularly children of immigrants, lived on benefits and got council property, enjoying their lives. Why should these parasites be placed in London, when those working hard cannot afford to buy with well earned money?

Olga, Moscow,

It only goes to show that nearly 60% of Britons are ignorant; it's more important to hold your own drinking in night clubs than understanding the realities of life.
Jim T

Jim Tomlinson, Solihull, West Mids

Interesting to see the supply and demand theory being stated and free market lionised. the housing market is not a free market, if it was there would be freedom of entry for new sellers, so as to increase supply, this is not the case, the planning regulations restrict the supply as do space constraints, thus creating an oligopoly which distorts the market in favour of the seller. so no crash until the market becomes free

Ben, folkestone, UK

Move away from London. If you are a key worker, then London will not be able to cope, people will move out and housing prices will fall. Other key workers (like cleaners) will be like gold dust and will have to be paid a more decent wage, or rich city boys will have to live and work in their own filth.

MB, York,

I agree with VC London, David. It was the Thatcher decision to change the Rent Act and do away with 'security of tenure' that changed the whole landscape of housing in this country. Up until then, when one was renting one had a sense of 'ownership' - if not of the property at least of the property-as-home. One also felt that one could move to another rented property with equal security. This all stopped in 1988 and this insecurity in renting with the resulting stampede to own has been a largely unacknowledged contribution to the massive price inflation in housing all over the country but especially in London.

A J McCabe, Doncaster,

Loads of people now are arguing that renting is cheaper and better and I'd agree in the short term it is. However, if a whole generation is forced to rent long-term there is going to a whacking great housing benefit bill in the future as those who've been unable to buy retire. Time to buy is already running out for those aged 35plus. This Housing Benefit time-bomb will bankrupt Britain plc, already feeling the strain of 1 in 3 households on benefits and pensions.
Mean while the super rich buy to let landlords will all be abroad raking in their profits and claiming tax relief on their interest only loans.
People say the price of housing is due to demand. But this market is not only dysfunctional, it’s rigged. Supply and demand never take place in a vacuum. Both supply and demand are affected by the decisions made by planners, and all manner of govt. departments. They are underpinned by values and cultural expectations. Today those values support gross exploitation and greed.

Jane, oxford,

To VC, London:

Renting is just that, renting. It is not a license to drop ones bags, pay the monthly charge and take over the rights of the owner.

Pre 1988 laws were outrageous and caused many tenants to live in squalid conditions and caused great financial harship to LL's. Despite the tenants right to stay, they didn't feel they should invest in their LL's property and their LL had no money to invest in it.

Things have changed for the better. Unfortunately for renters, that means paying a fair price for a property in relation to the rent it can command.

MM, London,

Why can't Britain offer the same very, low interest loans to nurses, teachers and Veterans' - we do it in the States!

Pat, FL, USA/ExPat,

Several points:

1. The economy does not run for the benefit of teachers and nurses. Others need "affordable" housing.

2. It is rapidly becoming the situation that the only way property may be owned in this country is for it to be inherited. So: say goodbye to 40% of its value (BEFORE you take posession, mind) to line government coffers.

I am a professional pilot, earning £25,000 and living in the NE England (traditionally one of the cheapest parts of the country). I have no debts, a good credit rating, a secure job and a decent amount of money (about £11K) in savings. I can't afford a house here.... God help those earning less than me and living in London.

Nigel Gray, Teesside, UK

Toronto is no different with regard to prices, a 1000 sq ft semi is about 8 times average gross yearly earnings. The difference here is that there is no such thing as gazumping. I understand that our system is similar to Scotland's, where you look at a house, like it, then present an offer with or without conditions. This is a legally binding document, to purchase the house at the specified price. If the vendor agrees, they sign it. Sometimes they sign it back with amendments. If you agree, you countersign. In any case, that's it once it's signed. The closing date is whatever is agreed in this document. You are legally obliged as the purchaser to complete the sale as described, as is the vendor. If the value goes up, lucky you, if it falls and you chose not complete, you can and will be sued for the loss by the vendor. We also do not have chains, because each contract is an independent entity. This gives certainty to your planning and tends to prevent rip-offs as outlined above.

Cliff, Toronto, Canada

To David from London:

The reason that people feel that they have a "right" to buy a property in London or anywhere in the UK, is because renting is not a stable option in this country.

The rights of tenants have been erroded since the 1988 Housing Act so that tenants have no sense of or actual stability. A home is a necessity not a luxury and not feeling secure in your home compromises your quality of life. I am putting off having a family because I do not feel secure. I will not risk being booted out by my landlord with children in tow. What is unsettling for me will be worse on them.

Also in a rented place I am under constant scrutiny from my landlord who visits every month at short notice and criticises the most ridiculous things that he has no right to do under the tenancy agreement. Despite this, I must comply or he can keep my deposit, SIX weeks rent.

And I can't invest any money making the place better because it is investing in HIS pension fund to my detriment.

VC, London,

What does India Knight propose we do about the salaries of so called poorly paid "key workers" in London? Pay them all £100K pa so they can take out a £300K mortgage to buy a flat? Where does she think the taxes will come from to pay for them all?
Perhaps if there was a genuine shortage of key workers in London, and the health service, fire service, police service, etc. collapsed, then maybe that would lead to a mass exodus of people away from the capital, problem solved.
Property prices work to their own unique economic laws, and nobody understands what they are.

Running on Empty, Gerrards Cross, Leafy Bucks

No-one seems to have mentioned the effect of stamp duty. This remarkably unstealthy tax causes illiquidity in the market and a shortage of vendors because no-one can afford to move homes. The prohibitive tax on repurchasing a property means that owners are, unsurprisingly, reluctant to sell.

ACB, London,

I love India Knight, always have. And I love her phrase, 'honourable job' because it hits the nail on the head. The answer lies in the Channel Islands. When they found their properties becoming playthings of the rich -with disastrous consequences for the locals - they created a dual market. Any city, including London, could do the same, and soon will have to.
It should not be beyond politicians to devise a foolproof scheme - the job would have to be 'honourable' and proven. Any city needs its 'honourable workers' and London cannot afford to have them commuting from Poole or Coventry.
It's not that hard. What is hard is the even more obvious, and comprehensive, solution - England (not Britain) needs a new city - and it needs to be somewhere over to the east, where a new airport needs to be sited. Who has the political will to do it?

John Carty, Medellin, Colombia

NO NO NO - expanding any airport is shear madness - the Government can spin the figures any way they like, more flights more Global Warming - once again we put Profit before the Planet, how short-sighted can you get?

If we are to save our planet, we should stop all air travel right now, cease all car production, make public transport free and give bicycles to everyone. Radical, yes - but we need this sort of action NOW. If nothing else (as if saving the planet is NOT important) we would have a cleaner environment, a healthier population and fewer road causalities.

Oliver Khan, LONDON, UK

How about NOT moving house. Just buy something and stay there. If you think you constantly need to increase space then just rent a place and move every 5 years or so. This national obsession with moving house all the time for a place that has a kitchen two feet wider than the previuos one is hugely contributing to the house price craze. As a mental exercise: What would happen if moving costs were to triple from one day to the other? Prices would come down hugely, people would stay put, would get to know their neighbours and not so much view their houses as investment, which it is not. But don't expect help from the government. They can not afford to run an economy with stable or falling prices.

Ulika, London,

Might it be the UNITED KINGDOM is now experiencing the "Housing Bubble" the United States just "Burst'?

sheila Frishe, Erie, Pennsylvania, USA

I endured the London rental market for 3 years. However, as civil servants in a government department that has partly made the leap to the regions, my partner and I recently bought a lovely 3-bedroom house in Bristol, for the same price as a friend's grotty one-bed London flat. While Parliament sits in Westminster, the heart of all government departments will remain in Whitehall, but there is no reason why most functions cannot be gradually moved out elsewhere. This would both realise the value of those centrally placed government buildings, and reduce the pressure on the London area for other public sector workers. To be fair, however, the Government is already trying to achieve this with its Lyons reforms, with some success.

Jenny, Bristol,

The house next door to me in London was supposed to be a shared ownership property for London workers on average salaries.
The Housing Association sold it to to a member of the local Councils housing department who has been renting it out ever since.

Jasonfried, London,

Yes, you could buy a minute bedsit above a crack den, OR you could just rent. Renting is now cheaper than an interest only mortgage in many areas of London, even without taking into account lost interest on the deposit.

Hannah Rawlings-Smith, London,

Buying proerty is not a right in London, look at New York everybody rents. Why do people in the UK automatically think they have a right to buy property.

London is after all one of the most affluent cities in the World and it stands to reason that certain areas would be out of reach for most ordinary people. This house purchase mentality needs changing, not the market!! Its unfortunate, but that is going to be the inevitable price of living in London!!!!

david , London , UK

I agree with the contributors suggesting mass migration out of London. If the Government actually started transferring departments out to the rest of the UK, that would balance the supply and demand inequalities considerably. The Department for International Development has some staff in East Kilbride but is mostly based in London - in this technological age, why not reverse this? Then East Kilbride gets lots of affluent new residents whose money will buy them a lovely detached house (instead of a cramped flat in a graffitti covered London side-street), extra wealth comes into the South Lanarkshire economy, London eases its housing crisis slightly, essential personnel still get to work in London, wealth is redistributed around the country and (hopefully) prices for lower end properties in the capital would begin to lessen. Isn't this obvious common sense?

Neil S, Glasgow, Scotland

Housing needs a radical re-think. Places on the open market are frankly beyond the reach of most of us. The government should be commended on the plans to build new council houses, but for low wage-earners there should also be many more shared-ownership schemes and similar solutions.

K John, London, UK

Build more new houses.

There are large parts of London and other cities that were thinly and poorly developed in the first half of the twentieth century. We could knock them down and start again. Of course, that would require investment in infrastructure, where we don't seem now to have quite the ability and energy we had in the past.

Frank Upton, Solihull,

We need to encourage emigration of the economically in-active. The easiest way would be to restore the index linking of pensions for people retiring abroad (something Margaret Thatcher removed and therefore something the Labour Party should reverse). This would encourage more of the old dears to cash in their chips and move to warmer climes in the European Union.

I have just found a gorgeous 4-bed house in the Dordogne for £180,000 - unfortunately business ties me to the UK. However, if I were a pensioner (particularly one on a gold-plated state employees pension) I would flog my dodgy bungalow in wet and windy Cromer for twice that and flee the country tomorrow.

Huw Sayer, Norwich, England

The whole housing market i a con. sure rich foreigners and cash buyers flock to london, but the biggest cause of availability of mortgage finance. this opuses up money supply and oushes up price the banks are laughing as borrowing goes up and up, and hence prices follow.

a hefty hike in interest ates followed by a nationalisation of all property in kensington and chelsea is what's required.

Andrew Anderson, rousse, bulgaria,

This is a subject much written about, but I can't see any workable solutions (let's build affordable housing doesn't do it for me). We have a more or less free market in operation here. Houses are only sold at enormous prices because people are paying such prices. Until this stops, such prices will continue to be asked. Is there any practical solution other than just letting the market sort itself out? Maybe there isn't and that's why the current government hasn't done anything. Eventually, non-London locations will be so cheap in comparison they will become irresistable and people will move. You know....Birmingham's not that bad!

John M, Birmingham, UK

London isn't the only happening city..a move Northwards would see a dramatic fall in house prices...or wait for the market to crash...bang..wollop...sometime...

Claire-upon-Tyne, Newcastle-upon-Tyne,

Dear Sir,
Ron Liddle, should stand for Parliament, his voice of reason and Honesty there, would bring back the belief and trust of the electorate.
Thank God we stil have some who fight for a better England.
Regards

Mr. John Nayler, Newport, Pembrokeshire

aside from the reasons mentioned already the abundance of buy to let investors is a major problem. we are currently looking to make our first steps onto the ladder, 3 years after moving to london and starting our careers, and are finding it hugely difficult to find somewhere we can afford, meanwhile newdevelopments are springing up around us targeted solely at the buy to let market and totally ignoring first time buyers

amy, london, london

I am a 23 year graduate and trying to get onto the property ladder. I keep coming across new develoments in the South West in which all of the 'affordable' housing has been set aside for the over 55s. Its all very well the government imposing on developers to fill a quota of 'cheap' 2 bedroom flats, but how are they of any use to anybody if they are then only to be sold to retirees leaving nothing for those of us stating out? Personally (and I dont want to sound ageist in this instance) I dont think the over 55s need any more financial help, especially with property. I'm not suggesting that the over 55s shouldn't enjoy their money; it's theirs after all, but have a care for the youth... the government seems to have actively forgotten us.

George, exeter, UK

To all those saying that public sector workers should move out of London - how sustainable is that? Right now that would seem like an answer but what about in 10-20 yrs? London is going to have to solve the housing problem some time or else public services will crumble once the 45+ age group retire as anyone younger than that in London can't afford a family home if they earn the average wage of (allegedly) 25000. It's not just a London problem either: even here in Edinburgh prices have become inflated beyond all reality. Monthly rents are now about 40% less than the cost of a mortgage on the same property (obviously depending on how much cash you put down) so clearly supply is not the issue. It's just a speculative bubble and the current govt isn't even bothering to suggest solutions. They're doing OK so that's all that matters. It's just not a sustainable way to run an economy.

MB, Edinburgh,

Though I doubt many places are as bad as the writer portrays things in metropolitn London to be, things are pretty much the same in other countries, such as the US, as well. Added to the housing hardships are the rising costs of food and petrol and other vital needs.

I expect, the rising home prices and the rampant rabid greed of vendors and agents, quite frankly, are only getting noticed, because the bourgeois middle/upper-midddle classes are finally feeling the same pinch that the working class and poor have been feeling for years. Is that cynical? No, sadly it is simply the truth. Which makes the whiging of these people, just another part of the problem.

I hope the government steps in for my UK friends soon, becuase they don't here, either--and now, rising cost of housing--unchecked by government--is the #1 contributor for homelessness in the USA. I hope that politicians in the UK show more care and concern for the people there, than here.

Nancy, Glens Falls, USA NY

It's the same situation on our side of the lake. My wife and I have to work 60+ hours a week to afford a home and put food on the table.

W. Aman, Pensacola, FL, USA

House prices in various areas have been unrelated to salaries of poorer professionals or ordinary workers for quite some time now. The influx of rich foreigners has been encouraged by this government through its tax, or should one say its non-tax regime applying to them. Also the astonishing bonus system for those in the financial sectors is another factor. I wonder if anyone has calculated the number of homes that they have and the effect on local economies as a result. One can't see how it will all end, unless public services like fire,health,police education and others collapse in these areas - though those at the top will probably be able to buy themselves out of the problem, as they have in the past.

stern, york,

In my area, affordable housing, supposedly meant for public service staff appears to be snapped up by estate agent and financial services staff well before it reaches the market.

Paul, Rochester, UK

Buying a flat for each of her children? Teachers are paid a pittance? What planet is India Knight on?

Chris Thomspon, Rotherham, S. Yorks

With every sympathy for public sector workers living & working in cities who cannot afford to buy a house, a reminder is perhaps required that this was exactly the case 35 years ago. Perhaps 'getting on your bike', to coin a phrase might be the best bet. As a newly qualified public sector worker staying in London & other big cities was not an option for many. If we had waited for the politicians to deliver low cost housing we would still be renting.The Labour government's manifesto included a commitment to low cost housing & they have failed miserably but they hanen't done so badly themselves. Yor health John Prescott. Glad to see you go.

Graham Peter, Pedriguer, Spain

If Heathrow and the Channel Tunnel were closed for couple of years, prices might level out to nearer to the Midlands and North.

As long as the population of London and the South East continue to increase and house building is constrained by planning/environment issues, the free market will respond in the usual way to a scarcity.

Paul , northwich, england

Teachers etc have to live near their place of work, and their place of work needs to be near the people. Civil servants and other government employees suffer no such restriction. As space in London is limited, the government should work on moving people out. It should start a policy of moving as many non-geographically limited jobs to cities like Birmingham and Manchester. Both are only 2 hours away from London on the train, but the removal of several hundreds of thousands of people would surely help in the present and the absence of these offices in London may mean other firms base themselves elsewhere as well.

Reasonably sized, brand new apartments in the city centre of Manchester (1 bed) sell for about 100k-150k, houses a mile from the centre sell for much less. The government would be helping teachers in London, and helping newly employed graduates outside of London.

The Lonely Planet has just heaped praise on the UK cities, surely we should use them?

Liz, Manchester, UK

it is tough but no-one has the 'right' to buy nor to live in the area they want to.

Perhaps if more jobs were available outside of the magnet of the SE or if society was less geared towards the I want it now culture rammed down our throats at every oportunity it might make a difference. Personally speaking, I can confirm there is life outside of London and I live happliy and I am very content in a 2 up 2 down mid terrance, no debts, no hassle and no mortgage for years - and I have no more than the average UK salary and I am not a public sector worker. House prices are going up everywhere but are not stopping 1st time buyers, like my new nextdoor neightbour 4 weeks ago, buying with confidence.

If you want to take part in the rats race, be prepared to live live like a rat.

Graeme, Huddersfield,

It's worth living in a hell and be easy to stay there than buy a house, rather a comfortable house worth living than some cupboard, pigeon-holed messy quarter. The rate of inflation world over and the sky rising real estate prices have made houses beyond the reach of a commoner, or anyone with reasonable and meager source of income .Whom should we blame ? The State Govt., house owners, vendors, real estate agents, or even the banks and financial institutions, providing loans and credit buy-out facilities for its clients. Infact it is the spiral effect, where the demand and supply curve desn't match up each other. It is a suppliers market, and buyers are nothing short of beggars. If you have big moolahs , large paying capacity , or some bloated, filthy rich person, the world is in your pocket , or else owning a house gives a big spat on one's wallet, making it cash strapped. Loans and mortgaging makes the living almost ike a shoe-string existence.Better pay rent than dent your pocket

Sanjeev Dheer, New Delhi, India

Hell is an understatement. This form of capitalism only serves the rich. Only those with money can make it.
I am a newly graduated Dr. of Chemistry and av. industry start salaries are say 25k. A 5 x mortgage doesn't buy u a grit bin in London. 7 years of Uni and incurred debt for what? I should have started as a plumber 7 years ago & would have at least been on the ladder now. But I'd idealism and naivity 7 years ago. The sciences benefit society through innovation which drives the econonomy - but only those who subvert society (by preying on the impossible situation that many young people are in) appear to be rewarded. Why cant the LABOUR govt. just build more houses, rather than olympic villages, millenium domes or trident submarines, for the benifit EVERYONE.

want to stay in scotland but no industry, glasgow,

Chris from Dudley. The demand supply argument is baseless. If there is such an imbalance in demand and supply, why are rents not rocketing up in line with prices? This is an asset bubble, pure and simple - one of many concurrent ones caused by cheap and easy credit.

Phil, London,

There is only excessive demand because no matter how stupidly high the prices climb, people believe they will be higher next year and the recent cheap and easy credit has allowed the foolish to continue to play this dangerous game.

If there was really an under supply of housing then rents would have risen as much as property values and this has not happened.

When people realise that prices are not going to rise for ever, the artificial demand will disapear and those that paid the high prices will have years to regret it.

Cliff, Chelmsford,

Just stop availability of cheap credit and the housing market will collapse... nothing in London is bought on actual affordability, it is just expectation of capital gains... this will be the biggest house crash of two centuries

Michele, Richmond, Surrey

It intrigues me that ministers etc. often talk of a certain proportion of new housing developments needing to be "affordable." How would they describe the rest?

Barry, Wallington,

Nothing to do with cheap credit. Fiddling around with the cost of credit merely affects the rate of change of the cost of property.

Occams Razor should be applied. If the number of people wanting a dwelling increases faster than the number of available dwellings then the price goes up, or put another way, a demonstration of the effect of supply and demand on price.

The only mechanisms to bring property costs down are to reduce the number of people looking for property or to increase the supply of property.

Any other "solution" merely modifies the symptoms of the underlying problem.

Chris, Dudley,

"who on earth can afford to buy any kind of property in London".
be realistic

john, london,

Tell us, why do you think this is? Why exactly do you think house prices have risen to record multiples of earnings? Why do you think it is now far more expensive to buy than to rent?

We are in the middle of a credit boom. The credit boom produces lots of cheap loans. These cheap loans drive prices up. The government then promotes 'affordable housing' and tries to subsidise purchases, and talks about getting on the 'housing ladder'. The result is to increase demand for purchased houses and lower it for rental housing, and consequently prices rise more.

If banks were not extending cheap credit there would not be a bubble. The credit bubble comes from government deficits fed by off balance sheet financing, a sort of Enronisation of our public finances, you will have a credit bubble, which will lead to an asset bubble, which will lead to a crash.

Brown is out just in time. As for the kids, tell them to rent. They'll be able to buy soon enough. You won't like that either.

George Johnson, London,