Homeowners’ silence over the rate rise speaks volumes about a broken market

aspirations the Conservatives served them well. So did Tony Blair. But it is Jeremy Corbyn who speaks for the fast-growing constituency of frustrated homebuyers. Capitalism seems a lot less appealing when you cannot see how you could possibly acquire the most popular form of capital: a home. Rent control seems, by contrast, very tempting indeed.

The Conservatives are not blind to the problem, but for the past eight years they have been trying to square an impossible circle: helping first-time buyers while simultaneously trying to boost the returns enjoyed by existing homeowners. The result was the Help-to-Buy scheme, which subsidises buyers while doing little to boost supply. The result, inevitably, has been even more house price inflation. While a lucky few buyers benefit, it has come at the cost of making housing even less affordable for the next generation.

If the Conservatives want to see off Corbyn they will have to stop trying to please everyone and shamelessly take the side of those who want house prices to fall – or at least remain stable. But house prices will only stabilise once their inflation is treated just like other forms of inflation: as a negative phenomenon which makes life more difficult for millions of ordinary people.

The Bank of England is charged with setting interest rates in order to target inflation in food, fuel, clothing and most other consumer goods. Since last year it has also used, as its preferred measure of inflation, an index called CPIH, which is claimed to include “owner occupiers’ housing costs” – but in fact uses rents as a proxy for mortgage repayments. Why not let the Bank of England track raw house prices? That would soon solve house price inflation.