Housing supply, investment demand and money creation: A comment on the drivers of London’s housing crisis

Abstract

This commentary examines the current emphasis on supply-side solutions to the housing crisis in England – building more homes to increase accessibility – against a backdrop of intensifying demand-side pressures, the financialisation of housing, and the impact of credit liberalisation and money creation on housing demand and prices. It reflects on the need to balance additional housing supply, where needed, with gradual ‘demand management’ responses that at last acknowledge the centrality of spatially unbounded investment demand and the flow of money created by deregulated banks into housing as fundamental to the current crisis of housing affordability and access.