SIR – Thanks to Mike Pollard (Letters, July 1) for the economics lesson. I didn’t refer to the US property market in my earlier letter, as I don’t think it has – or should have – a bearing on the market here.
As for a non-inflationary housing market “supressing” economic growth... herein lies the problem with our politicians and some economists. Simply relying on house-price, (or any) inflation to drive economic activity is madness. Is this why the German economy is so successful? I think not!
Mike does accept that the inflationary house price bubble contributed to the banking collapse. However, to avoid a repeat we should suppress the insane levels of house-price inflation, by creating a bigger stock of homes, particularly for a growing number of singletons and not necessarily by covering farmland and greenbelt. The availability of loans might be limited and the rental sector encouraged.
I’ve not considered this topic in any great detail, but worryingly neither have most serious economists and politicians (or so it seems).
John Hall, Pennithorne Avenue, Baildon
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