Buy to let landlords and the bubble
THE property boom and the credit binge and consumer spending allied to it is one of the greatest houses of cards ever constructed. When it does finally collapse it will have a profound impact on the entire economy and on all our lives. It has not been the
THE property boom and the credit binge and consumer spending allied to it is one of the greatest houses of cards ever constructed.
When it does finally collapse it will have a profound impact on the entire economy and on all our lives.
It has not been the 'sound management' of the Chancellor, but a property bubble, credit and spending in the shops, along with the world market, that have kept the economy afloat in recent times.
The Government has looked back over the past 15 years to determine what have been the biggest contributors to Britain's economic growth, which they never tire of claiming has outstripped all 'our competitors'.
The answer, according to the Office for National Statistics (ONS), is not computing or internet-based businesses. No, the biggest driver to economic growth has been the rise of the 'landlord class'.
Economic growth figures are calculated based on "gross added value". The ONS found that the gross added value to the economy from things such as iron and steel, railway transport and textiles had fallen by 50 percent or more since 1992.
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But the "value" created by the letting of dwellings rose to £45bn, a gain of 120 percent. In modern Britain, it seems, putting up the rent is somehow regarded as economic growth.
While the US still dominates in technology, Germany makes millions of cars, Japan makes consumer electronics, and China is catching them all up, Britain produces buy-to-let landlords.
How 'our competitors' must envy this economic success.