Monday , June 14 2021
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Well, yes, we expect this will be true

Summary:
The latest nonsense to afflict the British housing market brings this comment:First-time buyers in England will be able to apply for a discount of up to 50% on a new-build home under a government scheme. The First Homes initiative could save buyers £100,000 or more. But some experts say that with demand for these cut-price homes likely to exceed supply,….Well, yes, we expect that will be true. Offer something at less than market price and demand will outstrip supply. That’s definitional in the concept of market price - that being the price at which supply meets demand. There is nothing special about housing - or health care, food or beanie babies - in this respect. The market price is the price at which markets clear, at which supply meets demand.Still, this is nothing new for the Guardian

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The latest nonsense to afflict the British housing market brings this comment:

First-time buyers in England will be able to apply for a discount of up to 50% on a new-build home under a government scheme.

The First Homes initiative could save buyers £100,000 or more. But some experts say that with demand for these cut-price homes likely to exceed supply,….

Well, yes, we expect that will be true. Offer something at less than market price and demand will outstrip supply. That’s definitional in the concept of market price - that being the price at which supply meets demand.

There is nothing special about housing - or health care, food or beanie babies - in this respect. The market price is the price at which markets clear, at which supply meets demand.

Still, this is nothing new for the Guardian to misunderstand:

The waiting list for council housing in England will almost double to two million people next year,…

Councils housing is offered at less than market price. So, of course demand outstrips supply, that’s inherent in the price at which it is offered. The very price itself is what creates the shortage.

People queue up to buy stuff at lower than market price? Gerraway, really?

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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