Evening Standard comment: London’s housing crisis just goes on

A fall in prices is desirable but it must be slow and steady, rather than the sudden bursting of the bubble, if it is not to leave many thousands of Londoners over-extended
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London divides on the question of house prices: there are those property owners who want the value of their homes to continue to rise and would-be buyers shut out of the market by soaring prices. But such is the scale of the housing crisis at present that, according to a YouGov poll conducted for this paper, a third of Londoners would now like prices to come down “a lot” while nearly a fifth more would like them to come down a little. Only a sixth of respondents favour further price increases. Yet prices in May, even after falling slightly, are 22 per cent more than a year ago and over 10 times more than average salary rises in the same period.

This situation is attributable to problems of both supply and demand. As we report today, the population of the capital is soaring, with a continuing influx of people to London from abroad and elsewhere in Britain. The increase amounted to 108,000 in the year to June 2013.This paper has argued for an increase in housebuilding, not least through the building of greater numbers of mid-rise developments such as mansion blocks; we may too have to consider building on the green belt. We also need the big institutions to enter the rental market on a much bigger scale than at present as they do in Germany.

But we need to be wary of replicating the errors that led to the 2008 crisis when banks and building societies lent promiscuously to home-buyers. The Bank of England’s decision today to advise banks to be more cautious about the amount they loan to home-buyers is in the interests of those tempted to take on more debt than they can afford and of the market as a whole.

An ever-rising property market built on unsustainable debt is in no one’s interest. A fall in prices is desirable but it must be slow and steady, rather than the sudden bursting of the bubble, if it is not to leave many thousands of Londoners over-extended.

Britain’s jihadists

Concern has grown in recent months over the problem of jihadists from Britain who return home after fighting for Isis and other extremist groups in Iraq or Syria. Should we aim to reintegrate them, as recommended by Richard Barrett, the former MI6 head of counter-terrorism, or prosecute those who have committed offences?

The situation in law is quite clear: under the Terrorism Act 2006, it is an offence to undergo terrorist training or to attend a terrorist training camp. Isis is a repulsive fundamentalist force whose recruits may engage in acts of terrorism here. Some of the young men who join it may be motivated by repugnance at the Assad regime. Yet their actions are incalculably damaging to the region, aggravating sectarian conflict.

The answer must be to seek to prosecute those who are known to have engaged in fighting and those animated by extremist religious ideology. Some go out of their way to advertise their actions and beliefs online. Others who are involved only indirectly, and who pose no threat to this country in the judgment of intelligence services, may be easier to reintegrate into society. But we should err on the side of caution: we cannot risk hardened fighters bringing their war home.

The glass ceiling

Glencore Xstrata, the last company in the FTSE 100 with an all-male board, has finally appointed its first woman non-executive director, Patrice Merrin. It is a significant step for female equality in the boardroom — the last bastion has fallen.

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