Not an expert in macroeconomics either, but in a perfect free market there shouldn't be a lot of difference between renting and buying: if you can get a 5% yearly return by renting out a house, then the person renting from you can probably also get a 5% yearly return by investing their freed-up capital elsewhere and/or by not having to pay interest. If renting is too expensive, you buy, and if buying is too expensive, you rent. If one kind of investment like land or housing turns out to be particularly lucrative, capital will flow towards that type of investment and drive down returns towards the average again. Companies rent and lease stuff all the time, even if they have the money to buy, because often it just makes more sense. So there has to be something to disturb that happy picture and benefit owners at the expense of renters: a wonky tax structure, speculation, rate of return on land consistently higher than for other asset classes, cultural norms that value homeownership, who knows. Ownership of multiple dwellings by the wealthy might play a role, but in itself it's not a sufficient condition for high housing prices.

(It would be different if the wealthy were buying these houses to live in them or to leave them empty, as that would increase demand and constrain supply. Happening in London, Vancouver and a bunch of other places, I think. Also sort of like what happened with the quinoa fad: https://en.wikipedia.org/wiki/Quinoa#Effects_of_rising_deman...)

> I have a sinking feeling the situation would quickly improve if ownership had per-person limits

Running an economy on feelings is a sure way to ruin an economy. People who buy multiple dwellings would be more than happy to rent them. Renting is good. It provides a liquid market to access housing. If the market is efficient, rent or buy should be a preference rather than a financial decision: The financial impact should be the same.

If people refuse to rent, or sell their property then you have something wrong with your economy (too much regulations, people are afraid of devaluation, etc...). You don't fix a structural problem of an economy by implementing a per-person limit to buy houses.

Interesting that for natural monopolies (water supplies, power distribution, telco, radio spectrum) governments tend to regulate and de-monopolise. For real estate it's almost opposite and oligopolies are protected.

When we were young my (now) wife kept jumping from job to job around the south east, and we'd move pretty much every year. As we were renting it didn't cost much to move - hire a van for a couple of days and job done.

However when we settled down with kids priorities changed, living close to a train station with good connections for work was less important, school catchment areas were, and the main importance is stability. The longest rental contract you can take in the UK is 3 years, after that who knows what will happen - maybe the owner will sell up, maybe they'll double the rent. A 5 year or even 10 year fixed mortgage gives certainty.

But the key thing is we wouldn't be able to rent if nobody owned properties they didn't live in.

It's a hard problem to tackle as it would have to be a national law but that goes into individual state jurisdiction. I would say if our goal is to increase affordable housing we just need more of it.

Ban renting of single family dwellings, but allow and encourage it where increased density is achieved (apartments, condos, multiplexes, etc). Owners of single family dwellings will scramble to convert their rentals to duplexes / multiplexes and create the additional inventory while companies acquire multiple properties to convert into apartment complexes.

I'd still be renting if it wasn't for help to buy. The mortgage payment was the same as we'd pay in rent, so affordable, but saving up even a 10% deposit would have been impossible.

Which is then snapped up in a lot of cities (London SF Vancouver) by the newly rich from places like China / Russia as a way to get their money out of the country.

Buh... but the GDP went up? That's good right?

> cheap credit only affects how much the most desperate buyer is able to pay

I disagree with this statement, cheap credit allows banks to offer longer term mortgages and buyers able to afford a larger principal with the same per-month cost, pushing the prices upwards due to keeping payments low on a per-month basis, due to low interests and longer term plans.

This definitely pushes the price of all market upwards. It's a similar effect to tuition costs in the US, cheap credit, bankruptcy laws make them pretty safe for banks to take risk, flooding the market and allowing universities to hike prices.

Building is fundamental, but cheap credit has an upwards pressure in price, magnifying the effect.

All in all, I completely agree with your take on the solution. Build fucking more, population and specially cities have grown quite a lot on the past 3-4 decades, we still live with most dwellings built then than now.

> This becomes the limiting factor almost everywhere, meaning that prices would be equally unaffordable if credit wasn’t cheap.

The point is that cheap credit (mortgage regulation) significantly raises the upper bound on this limit.

In the UK, house construction companies buy up huge tracts of land and then build at a rate that keeps house prices high.

Profit margin at the publicly listed UK house builders in around 30%

So how do you fix this shit? We're basically fucked.

It's not like our government will get EU's permission to let the banks fail or something...