The price of houses

Sir: Level-headed as Stephen King is, there are two things to add to his analysis of the housing market (12 May). He says there is more to houses “than just bricks and mortar”. Too right: there is the land it stands on, which in property hot spots is worth much more than the building. The land value, costing nothing to produce, is purely inflationary. Mr King argues that that UK house prices are bound to rise because “there’s only a limited amount of land”. Currently one of the biggest (collapsed) housing bubbles is in Australia.

DBC Reed