Kristian Niemietz looks at how housing costs in the UK have exploded in recent decades. Real-terms house prices in 2011 were more than two-and-a-half-times higher than in 1975, with rent levels following suit. In the USA, Germany and Switzerland, real-terms house prices are still close to their 1975 levels.
· Housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.
· The main difference between the UK and its north-western European neighbours is not in demographics, but in completion rates of new dwellings.
· Empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs.