No, price increase is mostly due to inflation trends. When there is an inflation trend the house market follows, for example in London, after the start of the war in Ukraine things like gas and gasoline price went up which created a legit price increase for products that depends on those. But we've also seen an increase in rent. And that's because estate agents knew that since there was an inflation trend people were expecting to pay more. So the whole market went up with no significant change in supply and demand.
You’re wrong and you don’t know what you’re talking about, I don’t mean to be rude but it’s more than just inflation. There is a mismatch between number of people and number of housing starts, it’s been this way for 20 years. Estate agents charge more because people will pay it because anyone who can’t afford it goes homeless or moves somewhere else.
In London, where housing delivery has long trailed short of need, the population rose by 3.4 for every new home.
This mismatch of housing supply and need has had drastic consequences for affordability. Rents increased 2.0 per cent per year in England on average over the last decade, according to data from Hometrack. Growth ranged from 2.4 per cent per year in London, where housing delivery was lowest relative to population growth. In the North East, by contrast, housebuilding all but kept pace with population growth and rents grew just 0.7 per cent per year.
The ratio of house prices to earnings, another basic measure of housing affordability, increased from 6.9 in 2010 to 7.8 in 2019 across England. In the North East, where we delivered almost as many homes as people, homes became more affordable. In London, where housing supply falls far short of need, the ratio of house prices to earnings has ballooned.
A large part of the price in indeed related to offer vs demand but that's the basics for any market.
Now it's funny because you also say "Estate agents charge more because people will pay it because anyone who can’t afford it goes homeless [...]".
So it isn't just offer and demand isn't it?
When you think about it, even in areas like London the housing market is not liquid nor uniform enough for the offer vs demand model to apply. You don't rent/buy home like you buy strawberries.
In about 1 year there was no significant increase in demand and the supply stayed the same but everybody saw its rent increase.
Edit: Also we should not mix-things up, the housing market is very different in outliers like London compared to the more global market. Here we're in the context of those outliers (Paris, London, etc.)
